Usually, tax scams are elaborate heists that involve significant planning to avoid getting caught by centralized authorities. In the case of Irish banks, no such sophistication is necessary. Instead, Irish banks are using the political system to assist them in their efforts in paying no taxes on a €2.5 Billion profit in 2017.
How is it possible?
In 2015, the government changed the law to the effect that Irish banks (PTSB, BOI, AIB, Ulster Bank, KBC Bank) were allowed to ‘defer’ taxes for 20 years. Opposition TDs want the bank tax exemption scrapped, but most sources indicate that this is extremely unlikely to occur due to statements made by the Minister of Finance.
Irish banks do pay a €150 Million levy per year to contribute to the exchequer. In 2016, AIB paid €60 Million, BOI paid €38 Million, and PTSB paid €27 Million. Given that AIB and BOI each made a €1 Billion profit in 2017, the levy amounts to a ‘tax’ of 6% and 3.8% respectively.
Considering that a single Irish citizen pays 40% on salaries above €38,000 and 20% below, banks are not paying enough for a crisis they contributed to.
During the 2008 crisis, bondholders were paid off at the expense of the taxpayer. AIB and BOI were the costliest banks, requiring bailouts of €13 and €5 billion initially, though the total cost ran beyond €70 Billion. Pressure from the ECB and Tim Geithner of the US Treasury pushed the Irish government to avoid burning senior bondholders in 2010, as held in an official bank inquiry. The Irish public was furious at the bailout(s).
Irish banks are state-owned, and the narrative put forward is generally that banks must pay no taxes because it would hurt taxpayers. This idea would have worked not long ago, but after getting burned in 2008 and beyond with the European crisis, Irish citizens are a little wiser. The 2008 crisis also unveiled a large deal of corruption within all banks such as the falsification of accounts, questionable investment deals, and unsafe lending to property developers.
Cryptocurrency – an alternative to Irish banks
Fortunately, Irish people now have a choice. They can use the services of Wirex, who can serve as an effective bridge from fiat to crypto. All typical banking transactions can be facilitated. They also recently acquired an FCA e-money license, one of three crypto businesses supervised under the FCA as trustworthy and regulated. Additionally, there are also a wide range of credit and financial asset-based ICO projects which not only remove banks but make financial transactions cheaper and easier.
Alternatively, it is possible to invest in cryptocurrency directly and download a personal wallet. The Irish cryptocurrency scene is growing, given a sour political climate and a recent debt crisis.
The best way to vote within a broken political system is with the money that you have, taking it out of the fiat infrastructure where possible and putting it into decentralized alternatives, which are now available. Both banks and politicians have been proven untrustworthy, and neither shows any evidence of changing their behavior, as evidenced by the fact that politicians are assisting banks to avoid once again contributing to Irish welfare while banking a large profit.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.