John Gormley
Question:141 Mr. Gormley asked the Minister for Finance the number of environmental tax measures currently at his disposal. [5400/03]
Written Answers - Environmental Policy.
I assume the Deputy is referring to the imposition of taxes with a direct environmental effect. In relation to existing excise taxes, there are two in particular with environmental as well as purely revenue raising characteristics. Vehicle Registration Tax, VRT, broadly relates to engine size and, in turn, there is a general, positive relationship between engine size and CO2 emissions. The recent budget change in relation to the widening of the highest VRT band to include vehicles of 1901cc and over was in line with this established linkage.
Excise tax on mineral oils has an impact on usage of products with potentially adverse environmental effects. In my budget in December 2002, I announced an increase in auto diesel of 3 cent per litre, which took effect from budget night. In my previous budget in December 2001, I announced increases in both petrol and auto diesel which took effect from budget night, with a further increase from 1 March 2002 for auto diesel with a higher sulphur content. This measure was designed to encourage a speedy changeover to the use of low sulphur diesel. In addition to the above, as the Deputy is aware there is a plastic shopping bag levy which is collected by the Revenue Commissioners under the Waste Management (Amendment) Act 2001.
I said in my budget speech on 4 December 2002, Ireland has international obligations under the Kyoto Protocol to reduce greenhouse gas emissions. For this reason, the Government has asked the relevant Departments to advance the plans for a general carbon energy tax, with a view to introducing this from the end of 2004. This carbon energy tax will be an environmental tax measure. Given the many implications of such a tax, both environmental and economic, there will be full consultations with interested parties on the design of the tax and a reasonable period is being allowed for its effective introduction. There are other taxes or tax reliefs which may have indirect environmental effects or the potential to be used to achieve environmental objectives.