Tax-free aib

Anger at sweetheart deal to keep €1.6bn profits

AIB has been slammed for paying no tax on its €1.6billion profits this year.

The bank, that was bailed out by the Irish taxpayer to the tune of €20billion, is now depriving the Exchequer of millions in tax on its profits thanks to a sweetheart deal it negotiated with the Fine Gael and Labour Government in the downturn.

This allowed it to set off past losses against future profits for the purposes of tax and the lender is now reaping the rewards while ordinary taxpayers struggle to make ends meet.

At the same time, thousands of its customers are paying exorbitant interest rates on mortgages, way ahead of anything other banks in Europe are charging. Meanwhile, they are rewarding shareholders, many of them rich investors, with an impressive dividend pot of €325million for the year.

Sinn Fein’s Pearse Doherty demanded to know why the Government, which still owns nearly three quarters of AIB, is letting the bank away with it.

The party’s finance spokesman said: “Last week, we had Bank of Ireland announcing a €1billion profit and dividends of €124million

“This week, we have the spectacle of AIB telling us they have made a profit of €1.6billion and paid out a dividend of €325million.

“In both cases, these profits are tax-free. When these banks were nationalised, or part-nationalised, they originally could only carry forward 50% of losses against future profits.

“This was done so they would start paying tax as soon as they became profitable.

“In 2014, Fine Gael and Labour reversed this and allowed for 100% of losses to be carried forward resulting in the State losing out on hundreds of millions of Corporation Tax this year and for 20 years to come.” Meanwhile, AIB chief executive Bernard Byrne said the bank was on track to meet medium-term targets.

This State is losing out on hundreds of millions of Corporation Tax this year PEARSE DOHERTY SINN FEIN FINANCE SPOKESMAN