Finance Minister wanted to at least double take from bank levy as he said banks were enjoying huge profits largely sheltered from tax due to losses from Celtic Tiger crash

Finance Minister Michael McGrath was determined to increase the amount of money taken in from the bank levy as he said every indication was that the banks were going to enjoy “very significant profits”.

In pre-budget discussions, Mr McGrath said he wanted to aim for a take of “considerably higher” than €150 million from the banks as they were doing very well and much of their profit was “sheltered from tax” due to massive losses incurred during the financial crisis.

During the deliberations, the Finance Minister was also warned that any extension of the bank levy outside of the main banks was likely to face legal challenge in the courts.

In a series of submissions for the minister, officials said there were questions to be asked over why the levy should apply to financial institutions that had not been bailed out following the collapse of the Celtic Tiger economy.

The submission said that the levy had been introduced in 2014, repeatedly extended, and had begun to move away from “its original timeframe and effect”.

It said a number of other institutions were becoming liable for the charge due to how it was calculated based on DIRT payments [Deposit Interest Retention Tax].

The submission said: “Given that such institutions have not benefitted from tax-payer funded assistance during the financial crisis, and indeed my not even have been present in this country at that time, it is felt that they may have grounds on which to challenge their being required to pay the levy.

“Entities might also challenge the rationale for the levy if other providers of similar services are not in scope.”