Richard Bruton
Question:93 Mr. R. Bruton asked the Minister for Finance the proposals which the EC Commission has put forward on the taxation of home heating fuels; and if he will make a statement on the matter.
Written Answers. - Excise Duties' Proposals.
In the context of 1992 indirect tax harmonisation, the EC Commission has put forward proposals in relation to the rates and structure of excise duties, and the rate of VAT, which should apply to heating oils.
In regard to excise duties there are two sets of proposals. The first deals with the structure of excise duty on mineral oils and seeks to ensure that similar products are generally taxed in like manner and that tax-induced differences in the final price of these products are not such as to encourage fraudulent or artificial purchases. Mandatory exemptions from excise duty are proposed for natural gas, liquified petroleum gas (LPG) when not used as motor fuel, and coal.
The second proposal deals with the approximation of rates of excise duty on mineral oils. A rate band from 47 to 53 ECU per 1,000 litres — 16.5p to 18.6p per gallon — is proposed for heating oil; it would apply from 1 January 1993. Our present rate of duty on oil and LPG used for heating purposes is 17p per gallon. Both proposals have yet to be discussed.
In regard to VAT, the Commission has proposed that fuels for heating and lighting be taxed at a rate in the reduced band of 4 to 9 per cent. However, in Council deliberations on the matter to date, a majority of member states have supported standard rating for environmental and conservation reasons. Final decisions on this question are due to be taken by the end of this year.