European Central Bank asks Ireland to rethink ATM tax

The European Central Bank has recommended that Ireland reconsider a plan to impose a new charge on cash withdrawals from bank machines.

It says it is concerned that it would make the use of the euro currency more expensive than electronic methods of payment.

To promote usage of card payments, the Government has announced a plan to replace a combined flat rate charge on cash, debit and credit cards next year.

It wants the new levy to be based on withdrawals using cards from ATMs.

The ECB was not consulted on the draft law.

However, in an opinion published on its website, ECB president Mario Draghi said that such a charge could affect the legal tender status of euro banknotes whose issuance the monetary authority authorises.

“The ECB understands the objective of encouraging the greater use of electronic methods of payment in Ireland,” it said.

“This should not, however, lead to legislation making the use of euro banknotes more expensive than electronic methods of payment, thus putting legal tender at a disadvantage,” Mr Draghi said.

“The ECB notes that the proposed stamp duty on ATM withdrawals could make the use of euro banknotes more expensive and would therefore recommend that the measure be reconsidered,” he said.

Under the new law, consumers will pay 12c per ATM transaction up to a maximum of €2.50 to €5 depending on card type.

That is the same level the current combined charge is capped at.

Reuters