I welcome the Minister of State, Deputy Ossian Smyth, to deal with this particular piece of business.
Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Bill 2023: Committee and Remaining Stages
Section 1 agreed to.
SECTION 2
Amendments Nos. 1 and 2 are related and will be taken together.
I move amendment No. 1:
In page 6, line 37, to delete “23 September” and substitute “28 July”.
Amendments Nos. 1 and 2 seek to speed up the process of providing relief to households by legislating for the temporary solidarity contribution, TSC, to be paid to the Revenue Commissioners on 28 July, as opposed to 23 September. They push forward the date on which the TSC is due from 23 September to 28 July in 2023 in amendment No. 1 and 2024 in amendment No. 2.
This is because people need urgent relief, and they need it now. The Government and the energy companies have had long enough, and it is high time that we got this system up and running. This is an appropriate and reasonable proposition. Businesses will already have completed their annual accounts for last year. They know what their profits were during the reference period 2018 to 2021 and in 2022, which is what amendment No. 1 deals with. Therefore, a 28 July deadline is in my opinion both feasible and realistic.
The same can be said of amendment No. 2, which addresses profits in 2023 and moves the deadline to 28 July 2024. Profits will have already been calculated. We believe this is a matter on which people have waited long enough. We have waited long enough for this legislation. We need to look at every line of the legislation and see where there is room for acceleration. I believe both of these amendments insert the appropriate level of impetus at this already delayed stage.
Minister of State at the Department of Environment, Climate and Communications (Deputy Ossian Smyth)
I thank Deputy O'Rourke for tabling these amendments. I am opposing these amendments on two grounds, which I will go through. The specified date in this Bill, as referred to under section 2, provides for when the temporary solidarity contribution is to be payable by an energy company and section 8, which provides for when an energy company must make a return to the Revenue Commissioners.
The 23 September payment and return date for temporary solidarity contribution was chosen to coincide with the payment of corporation tax from which the temporary solidarity contribution is deductible. Bringing the payment date forward by two months, particularly in respect of the payment due in 2023, could mean that the companies may not have their accounts and the necessary information ready in order to make a return to the Revenue Commissioners. It is for that reason that they are fileable on the same date.
In addition, the second reason is that bringing forward the return date to 23 July would mean that a company would be required to make a return to the Revenue Commissioners before it is required to give notice to the Revenue Commissioners, as per section 7 of the Bill, which is currently 30 August.
Section 7 of the Bill requires that companies warn and notify the Revenue Commissioners of the payment they are going to make by 30 August and yet the amendments we see before us require that the filing date be brought forward to before the warning date, so they would be warning Revenue about something that had already happened in the past.
There is also a possibility that the legislation may not be commenced by the proposed date of 28 July. In that case, there would not be a legal basis on which to collect temporary solidarity contributions. For those reasons, therefore, I am not proposing to accept those two amendments.
I accept the Minister of State's arguments with regard to those timelines. However, I find it deeply concerning that the legislation might not be commenced by 28 July. Eighteen other European countries have moved on this legislation and are at a significantly advanced stage in many of those. We have had delay after delay, and we have a handful of amendments to discuss today because so many of them have been ruled out of order. There is an absolute consistency in what we in Opposition are trying to do in our amendments. It is to act more aggressively to ensure there are fewer loopholes for companies to avail of and ensure this funding is made available as quickly as possible and that it is specifically made available as a relief for people with the sky-high cost of electricity.
I will not press the amendments. I accept the Minister of State's argument on those technical issues regarding tax timelines and reporting. We need to act with haste on this legislation and people need to see the relief as quickly as possible.
The amendments are not being pressed. Did Deputy Bríd Smith want to say something?
I do. I did not realise we were on section 2 already. One of my amendments was ruled out of order. That was to argue for 100% of the tax to be taken. That has been ruled out of order because apparently it would have a cost to the Exchequer. There are many problems with the Bill and much that we did not foresee when we saw the heads of Bill. I hoped it would be quite a progressive Bill and would do something really meaningful. It has actually given a sort of veneer or makeover to a thing the Government does not really want to do, which is to impose extra tax on energy companies, but needs to be seen to do. It is only, for example, affecting fossil fuel companies. There are no caps on revenues for renewable companies, in this version at least. It may be added later on. Will we ask wind farms and so on to return some of their profits to offset the crisis for ordinary people? It will not apply to all profits. It is set at 75%. That is why I argued for 100%. Will the Minister of State please explain why it is set at 75%, even if it has been ruled out of order?
The loopholes are absolutely incredible. It is like a sieve. The losses in any of the five previous years can be offset against the Oireachtas liaison. Any capital acquisition in the last years can be offset against the tax. Any tax payable, as I understand, can be offset against corporation tax. It is worth saying again that this Bill is a little too late and does not deal with the systemic issues that the energy crisis has highlighted for us. It will not stop any future price-gouging or profiteering by these energy companies. It does not do anything to address the level of energy poverty or the continued fear that people have of their energy bills. The crisis does not stem, I am afraid, from the Ukraine war. It stems from the privatisation and liberalisation of the energy market back in the 1990s and the 2000s. The Ukraine war has absolutely not helped, it has compounded it, but the fact that this is a totally liberalised market instead of one controlled and sustained for the benefit of society means we will face this again and again. It really makes the case for the re-nationalisation of the energy sector. I am disappointed that these have been ruled out of order. I ask the Minister of State to explain these issues, please.
We are on amendments Nos. 1 and 2 and I have allowed some latitude. The amendments are not being pressed.
I will wait to speak on my amendment, which I think is next anyway.
The amendments are not being pressed. Deputy Smith's has been ruled out of order and is off the agenda. I have allowed latitude in relation to it. I am sure the Minister of State might come back in due course about the issues Deputy Smith raised.
Fair enough.
Amendment, by leave, withdrawn.
Amendment No. 2 not moved.
Section 2 agreed to.
Section 3 agreed to.
NEW SECTION
I move amendment No. 3:
In page 7, between lines 12 and 13, to insert the following:
“Reporting
4. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the application of, including the use of the proceeds from, the Temporary Solidarity Contribution.”.
This is my only amendment, unfortunately, because the remainder have also been ruled out of order due to the money message. There are questions to be asked about the money message because the amendments we tabled were not going to be a cost to the State. They would have brought additional money to the State. The Constitution states, "no law shall be enacted, for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dáil Éireann by a message from the Government signed by the Taoiseach". I do not see how my amendment, which dealt with the ring-fencing of money, could be seen as costing the State anything additional. It was just a way of divvying up that money. The Minister of State himself said that all contributions and revenue accrued from this would be ring-fenced for the purposes of using that money in a targeted way to assist with energy costs and energy poverty. I fail to understand how this money message was put in place. Indeed, some other Members of the Opposition changed the calculations in order that more money was being brought in. I do not think that is a correct way of applying the money message and wanted to put that on the record.
This amendment relates to reporting. The amendment states, "The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the application of, including the use of the proceeds from, the Temporary Solidarity Contribution." That essentially mirrors what is expected from the EU of Ireland when this TSC is applied. That is done through Council Regulation (EU) 2022/1854 on the emergency intervention to address high energy prices. It specifies that "Regular and effective monitoring and reporting to the Commission are essential for the assessment of progress made by the Member States in the achievement of the demand reduction targets, the implementation of the cap on market revenues, the use of the surplus revenues, and the application of regulated prices" and accordingly that "Member States should report to the Commission on the application of the solidarity contribution" and "Member States should also report on the use of the proceeds from the solidarity contribution".
That is an appropriate thing for the EU to require of each member state. It is also appropriate for the Government to report to Members in this House too, which is why I incorporated that amendment. There should be transparency about this TSC, how it is applied, how much money the Government gets in, and what the Government is going to do with that money. That needs to be a transparent process. As I stated, last week, when I debated this, this windfall tax, as people would call it, serves two purposes. One is to ensure that energy companies are not profiting from war. It also serves the purpose of having people, members of the public, who have suffered as a result of high energy costs being put on them as a result of the war and profiteering by companies, being able to be sure that energy companies are being held to task when it comes to these payments and that this is a matter of gaining and keeping trust with the public. They can then believe that politicians in this Chamber recognising the difficulty they have and are going some way to assist them. To do that, we need to have full transparency about that money, which is why I have incorporated it in that section.
I hope the Minister of State will accept this amendment. It is a small, minor amendment but it is important. As I said, the Minister of State was already providing that information to the EU. All we would ask would be that he also provide it in this Chamber.
I support this amendment. It is imperative that the TSC is applied and distributed to provide urgent relief to households. This amendment would provide for important oversight of the Minister's application of the TSC and the distribution of its proceeds. A report could provide critical insights into how effective the measures were in providing urgent relief to households and how robust enforcement measures were, with a view to improving them in 2024. A report would also be useful to explore the possibility of extending the measure beyond 2022 and 2023. I agree entirely with Deputy Whitmore about the money message. In this amendment, she has learned from the experience of previous occasions and crafted an amendment that was not going to be ruled out of order. I, maybe being a bit more stubborn, tried to take a different approach on this. I would argue that this legislation should be explicit that this money will be used to provide relief for people. I tabled amendments that have been ruled out of order under the same crazy interpretation of the money message.
We are here to debate a solidarity contribution. We in the Opposition want the opportunity, I think understandably, to engage on that legislation to tweak and improve it and to stress-test the Minister of State's argument. Many of the amendments we submitted were ruled out of order based on Standing Orders stating that we in the Opposition cannot raise or reduce revenue. In the context of debating a revenue-raising proposal, that is outrageously frustrating for us.
This is a reasonable proposal. There were many similar amendments, tabled by Deputy Bríd Smith and others. We tabled amendments that were more ambitious and would have gone beyond the 75%, but we will not have an opportunity to discuss that. The amendment before us is a reasonable proposal and while it does not go as far as I would have liked to enshrine conditions for the Government in regard to how to use these windfall gains, I fully support it and think the Government should accept it.
We are talking about windfall gains in the energy sector and deciding how to divvy out the gains from companies that have made windfall profits. This should not be happening at all because the companies should be charging according to what it costs them to make the electricity and taking only a reasonable profit, yet, as we know, they are making massive profits. The Government is trying to divide out their profits and gains to those whom it thinks it should, but it should go to the people who are paying the bills at, for example, 46 cent per kilowatt-hour when they should be paying only 18 cent. This has happened because of the closure of Bord na Móna in the middle of the country, jeopardising the whole energy sector, where a few of these companies are making vast sums and the Government is hoping to get a windfall tax from them to divvy out.
That is very unfair. People are paying massive bills. The Government talks about inflation. The European Central Bank and others are raising their interest rates to counteract inflation, and people are paying extra on their mortgages and will be asked to pay a lot more in the hope of keeping down inflation, but inflation is caused by the cost of energy, whether that is electricity, diesel or petrol. That is where the inflation is caused. These people should not be charging the sums they are charging and should not be making massive profits. The Government then comes from behind to divvy out the gains and impose a windfall tax. That is all wrong. Ordinary people are being hurt every day of the week trying to pay these massive electricity bills, and the Government then comes along trying to be do-gooders who will pay back money to some people, when it has already taken it out of their pockets.
I was asked why I ruled certain amendments out of order. As I am sure Deputies are aware, I do not have the power to rule amendments in or out of order. Second, I was asked why the legislation will not apply to wind farms and solar farms. It will apply only to oil refineries and fossil fuel producers. A second item of legislation, to be published before the recess, will apply to excess profits from other generators such as wind farms and solar farms. That legislation will be passed during the autumn, I expect.
The percentage rate on excess profits has been set at 75%. The EU recommended a minimum rate of 33%. I think we have set the highest profit tax in the EU.
To return to Deputy Whitmore's amendment, which seeks to provide for greater reporting on how the temporary solidarity contribution will be distributed, this is legislated for in the regulation from the EU. Article 17 of the Council regulation sets out five purposes, any of which can direct the use of proceeds from temporary solidarity contributions. Those five purposes are financial support measures to mitigate the effects of high energy prices for final energy customers, help reduce energy consumption, support companies in energy-intensive industries, develop the energy autonomy or assign a share of the proceeds of the temporary solidarity contribution to the common financing of measures to reduce the harmful effects of the energy crisis.
The regulation is now in force. It also requires the proceeds distribution measures to be “clearly defined, transparent, proportionate, non-discriminatory and verifiable”. The Government, therefore, has to distribute these proceeds according to the law set out in Article 17. It has to be done in a way that is transparent, proportionate and verifiable, which means we will have to report on it. That has been legislated for. The energy poverty steering group, which my Department chairs, will be consulted on the distribution of proceeds collected from the temporary solidarity contribution. There will be a Government decision on the distribution of proceeds from the temporary solidarity contribution, which will be made publicly known. The revenue collected from this contribution will have to be spent in the ways determined in Article 17, must be used for energy consumers and must be done in a transparent and verifiable way. I commit that the Department will do that.
As for how much specific companies contributed, there are data protection considerations, so I do not believe that, legally, I can publish the exact figure each company's contribution amounted to.
It is for those reasons that I do not propose to accept the amendment.
Article 17 specifies what the proceeds from the temporary solidarity contribution will be used for. It does not specify any reporting mechanisms, from what I can see. It refers only to using it for final energy customers and the other provisions the Minister of State read out. My amendment relates specifically to reporting to this House on what the temporary solidarity contribution has been used for and how it has been applied. As I said, that reporting has to go to the EU as it stands. As part of the directive, there are requirements for the Government to report to the EU, but there is no requirement within that EU directive regarding how it reports to this House. That is outside the EU's remit.
Accordingly, I ask that the Minister of State include this provision in the legislation. It is not a big ask that a report would be laid before this House to tell us exactly how the money was collected, how much was collected, when it was collected and how it was used. That is not provided for in this direction at all. The EU will not tell houses of parliament how to report to their own members. That is for the Government to decide and to put into this legislation. I ask the Minister of State to accept this simple amendment. We hear all the time from members of the Government about how the Opposition just come up with problems rather than solutions and do not offer anything constructive. Here is a simple, constructive step the Government can take, so I ask it please to take it on board and not to pretend it is going to do it any event just because the EU has said so, given that is not the case.
The provision is not in Article 17 but elsewhere in the regulation, where it is specified that the proceeds’ distribution measures must be "clearly defined, transparent, proportionate, non-discriminatory and verifiable". There are reporting requirements and we are going to follow them as they are. It is important we present this information, but I do not propose to accept the amendment.
At no point has the Minister of State mentioned that there will be requirements for him or the Department to report to the Dáil. The EU will not tell them they have to report to the Dáil. There is an understanding of subsidiarity here. The EU will not tell the Government what it has to come in and tell us.
The Minister of State will not be reporting to this Dáil on this matter. The Minister of State, Deputy Ossian Smyth, will be reporting to the EU. All I ask is that the report the Government gives to the EU would also be laid before this House, to show this House some respect. This is, of course, taxpayers' money. This is money that energy companies took, essentially as part of the profits of war. They took it from people's pockets, which incurred huge pressures on families while that happened. People deserve to know that this money was clawed back and where this Government will be spending it. I ask that the Minister of State would not refer to the EU. The EU is not putting any requirements on the Minister of State to inform this Chamber of anything. Will the Minister of State please tell me that he will take this amendment and that he will use the amendment and commit to actually report to us in this Chamber on how the Government will use the money?
Once again, this is existing EU law. It is a regulation and is in force. It requires that the distribution of these funds be verifiable and be transparent. They will be. They will be reported on according to the regulation.
Amendment put:
The Committee divided: Tá, 58; Níl, 75; Staon, 0.
Tá
- Andrews, Chris.
- Bacik, Ivana.
- Berry, Cathal.
- Boyd Barrett, Richard.
- Brady, John.
- Browne, Martin.
- Buckley, Pat.
- Cairns, Holly.
- Canney, Seán.
- Carthy, Matt.
- Clarke, Sorca.
- Collins, Joan.
- Collins, Michael.
- Conway-Walsh, Rose.
- Cronin, Réada.
- Crowe, Seán.
- Cullinane, David.
- Daly, Pa.
- Doherty, Pearse.
- Donnelly, Paul.
- Ellis, Dessie.
- Farrell, Mairéad.
- Fitzpatrick, Peter.
- Funchion, Kathleen.
- Gannon, Gary.
- Gould, Thomas.
- Guirke, Johnny.
- Harkin, Marian.
- Healy-Rae, Danny.
- Healy-Rae, Michael.
- Howlin, Brendan.
- Kerrane, Claire.
- Mac Lochlainn, Pádraig.
- McGrath, Mattie.
- Mitchell, Denise.
- Munster, Imelda.
- Murphy, Catherine.
- Murphy, Verona.
- Nash, Ged.
- Naughten, Denis.
- Nolan, Carol.
- O'Callaghan, Cian.
- O'Rourke, Darren.
- Ó Broin, Eoin.
- Ó Laoghaire, Donnchadh.
- Ó Murchú, Ruairí.
- Ó Ríordáin, Aodhán.
- Pringle, Thomas.
- Quinlivan, Maurice.
- Ryan, Patricia.
- Sherlock, Sean.
- Shortall, Róisín.
- Stanley, Brian.
- Tóibín, Peadar.
- Tully, Pauline.
- Ward, Mark.
- Whitmore, Jennifer.
- Wynne, Violet-Anne.
Níl
- Brophy, Colm.
- Browne, James.
- Bruton, Richard.
- Burke, Colm.
- Burke, Peter.
- Butler, Mary.
- Byrne, Thomas.
- Cahill, Jackie.
- Calleary, Dara.
- Cannon, Ciarán.
- Carroll MacNeill, Jennifer.
- Chambers, Jack.
- Collins, Niall.
- Costello, Patrick.
- Coveney, Simon.
- Cowen, Barry.
- Crowe, Cathal.
- Devlin, Cormac.
- Dillon, Alan.
- Donnelly, Stephen.
- Duffy, Francis Noel.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frankie.
- Flaherty, Joe.
- Flanagan, Charles.
- Fleming, Sean.
- Foley, Norma.
- Grealish, Noel.
- Griffin, Brendan.
- Harris, Simon.
- Haughey, Seán.
- Heydon, Martin.
- Higgins, Emer.
- Humphreys, Heather.
- Kehoe, Paul.
- Lahart, John.
- Lawless, James.
- Leddin, Brian.
- Madigan, Josepha.
- Martin, Catherine.
- Martin, Micheál.
- Matthews, Steven.
- McAuliffe, Paul.
- McConalogue, Charlie.
- McEntee, Helen.
- McGrath, Michael.
- McGuinness, John.
- McHugh, Joe.
- Moynihan, Aindrias.
- Murnane O'Connor, Jennifer.
- Naughton, Hildegarde.
- Noonan, Malcolm.
- O'Brien, Darragh.
- O'Brien, Joe.
- O'Callaghan, Jim.
- O'Connor, James.
- O'Dea, Willie.
- O'Donnell, Kieran.
- O'Dowd, Fergus.
- O'Gorman, Roderic.
- O'Sullivan, Christopher.
- O'Sullivan, Pádraig.
- Ó Cathasaigh, Marc.
- Ó Cuív, Éamon.
- Phelan, John Paul.
- Richmond, Neale.
- Ring, Michael.
- Ryan, Eamon.
- Smith, Brendan.
- Smyth, Niamh.
- Smyth, Ossian.
- Stanton, David.
- Troy, Robert.
Staon
Tellers: Tá, Deputies Jennifer Whitmore and Holly Cairns; Níl, Deputies Hildegarde Naughton and Cormac Devlin.
Amendment declared lost.
SECTION 4
Amendments Nos. 4 to 9, inclusive, have been ruled out of order.
Amendments Nos. 4 to 9, inclusive, not moved.
Section 4 agreed to.
SECTION 5
Amendment No. 10 has been ruled out of order.
Amendment No. 10 not moved.
Section 5 agreed to.
SECTION 6
Amendment No. 11 has been ruled out of order.
Amendment No. 11 not moved.
Section 6 agreed to.
Sections 7 to 16, inclusive, agreed to.
SECTION 17
Amendments Nos. 12 to 14, inclusive, are related and will be taken together.
I move amendment No. 12:
In page 15, to delete line 16 and substitute the following:
"
|
Return delivered between 0 and 2 months from the specified date |
5 per cent |
".
Amendment No. 12 states that if a return is delivered between zero and two months from the specified date, companies will pay a surcharge at a rate of 5%. Amendment No. 13 states that if a return is delivered between two and six months from the specified date, they will pay a surcharge at a rate of 10%. Amendment No. 14 states that where a return is delivered after six months, they will pay a surcharge at a rate of 50%.
Amendments Nos. 12 and 13 bring this surcharge measure in line with the section 1084(2)(a) of the Taxes Consolidation Act 1997, which applies a 5% surcharge where a return is delivered between zero and two months, and a 10% surcharge where a return is delivered between two and six months. The maximum increased amounts per time period for late return are €12,695 and €63,485, respectively. The Government's version of the Bill had a surcharge of 5% between four and six months, and 10% after six months, with the same maximum amounts. Amendment No. 14 increases the surcharge by 50% after six months, and there is no cap.
We need to ensure that energy companies pay this contribution, and this is taken extremely seriously. These eye-watering profits were earned off the back of war, a pandemic and a cost-of-living crisis. Irish workers and families have not had a break, and they urgently need relief from these rip-off, extortionate energy costs. This is exactly what this should be used for, which is what our other amendments had called for concerning the distribution of proceeds.
As I have said, amendments Nos. 12 and 13 bring this measure in line with the Taxes Consolidation Act. It is reasonable to ask why the Government, in its proposal, wants a more lax regime when it comes to the enforcement of this temporary solidarity contribution. In fact, it is the opposite. In the suite of amendments that have been proposed by the Opposition - many of them ruled out - it has been about being more aggressive with this tax and going further beyond the 75%. It is about ensuring that write-offs or loopholes are closed with regard to losses and capital expenditure, focusing on how the moneys raised will be spent in terms of ring-fencing, and directing funding towards those who need it. That is everyone, because everybody has suffered the increased cost of energy.
I propose these entirely appropriate and important measures as a statement of intent from these Houses that we recognise that super-excess profits have been earned on the back of war. Those moneys need to be collected and distributed to those people in need. We cannot allow for loopholes or a lax regime that is even more lax than the one that is available for general businesses and the public in making their tax returns. We need a stronger regime, and that is what we are proposing here. It is important that the Government supports and adopts it.
I want to speak in support of amendments Nos. 12 to 14, inclusive, under section 17 of the Bill. As it stands, the timeframe for imposing surcharge penalties is too long, and the surcharge is too low for it to have any real standing for companies of scale and resourceful companies. The 5% surcharge should be imposed within the first two months of non-payment. The 10% surcharge should be implemented after two months of non-payment, and a 50% surcharge imposed on those who neglect to pay after six months. These measures will act as an incentive to make sure the due revenue is furnished to the State in the shortest possible time.
Another point I would like to make about this Bill is that the implementation of the solidarity contribution should be absolutely obligatory. There should be no room for any effort at avoiding payment. As such, I support the proposal to remove lines 29 to 34, in page 7 of the Bill, and to replace them with a definitive commitment that arrangements will not be permitted to have the effect of reducing the amount of taxable profits.
I also want to make a general comment on the Bill itself. The introduction of the solidarity contribution is welcome, It is important that the revenue gained from this charge is used for the purpose of reducing customer energy prices and removing people from the energy poverty quagmire that so many people find themselves in. While the public have suffered these high costs, many energy companies, as we are all well aware, have been earning extraordinary profits, and showing little to no inclination to pass them on to consumers. The Government has offered extremely limited supports to consumers, and prices have got to an unaffordable level for small businesses and personal consumers alike. If one compares the January 2023 retail electricity and gas prices with those of January 2021, one will see that there have been increases of 98% and 138%, respectively. It seems that these prices are set to continue for a considerable period of time. It is deplorable that working families are struggling so much while the energy companies have seen soaring profits. People are now working solely to pay the bills. There is nothing left over. Food prices, rent and mortgage rates and energy prices have gone up, but those on lower and middle incomes are simply working to pay these bills. There is nothing left for the rest - nothing for the odd dinner out or a weekend break. There are just ever-rising bills.
Households continue to pay sky-high energy bills, with electricity and gas bills more than double what they were two years ago. I have been made aware of some extremely high bills by my constituents in Limerick. Many elderly people have been charged hundreds of euro in their most recent bills, and in some cases more than that. Many of those affected are worried about how they are going to pay, and some residents have spoken to me about needing to take out loans to pay for these essential services. It is not good enough that citizens, particularly those depending on modest pensions, are facing such stark choices when it comes to paying their bills. As I said, energy costs are sky-high, and families are struggling to afford them. People who are facing huge bills are anxious about where these spiralling costs will end.
I want to reiterate my support for amendments Nos. 12 to 14, inclusive. I appeal to the Minister of State, Deputy Smyth, to accept them.
I thank the Deputies for these amendments. This Bill provides for a surcharge to be applied to overdue payments. The surcharges currently provided in this Bill are a 5% surcharge on returns not delivered between three and six months of the specified date, and a 10% surcharge on returns delivered within six months of the specified date.
These surcharge percentages and timeframes are considered appropriate. They are also considered to be legally robust, given the timeframe between the possible commencement of this legislation and the payment date. These surcharge percentages are also comparable with other enforcement measures in existing legislation. It is a tight timeframe. We expect that the period between having legislated for these taxes and the date when the taxes are due will barely be two months. It is also new legislation. We have looked at previous legislation, and we have tried to set the percentages in line with it. I consider the proposed 50% rate to be disproportionate. If one owed money to Revenue, and one was six months late with it, a 50% surcharge would be very high.
This is substantial legislation. We expect to collect hundreds of millions of euro from it. We expect that these companies will be compliant. If they are not, the fines will be very significant, given the large amounts of money that are involved. We have to make sure that the legislation that we pass is legally robust and that we do not get tied up in challenges, so we have taken some time to make sure what we have is proportionate legislation. For those reasons, I am not accepting the amendments.
I do not accept the Minister of State's argument. In fact, I spelled it out there. Sinn Féin's proposals are to bring these measures, in the first instance, in line with the Taxes Consolidation Act 1997. Why should there be preferential treatment in this response for energy companies?
The 50% rate would really be a statement of intent from the Government that it is very serious about collecting this and about ensuring there will not be avoidance, given the circumstances. The Minister of State spoke as an example about people being late with their payments to Revenue.
Let us think of the circumstance in which these super-excess profits are being made while so many people are struggling with the cost of living. We must bear in mind, thanks to the delay by the Government, we are already very late to the table in relation to this. The regime that we propose here actually more closely reflects the type of regime that should be in place given the circumstance of this windfall tax. These are super-excess profits raised on the back of conflict in Europe. Families are increasingly driven into energy and fuel poverty and they are struggling with the cost of living. We have heard from economic commentator after economic commentator about the role of profiteering in driving inflation, as opposed to the ordinary increases in terms of the supply chain or whatever it might be.
Coming out of Covid and the war in Ukraine has been a bonanza for certain companies. It is important that governments, here and across Europe, introduce legislation that is robust and effective and determines the rules of engagement. Our proposal is proportionate. Any company that is affected by this temporary solidarity contribution can avoid all of these costs by being on time. I do not think the Minister of State's argument is reasonable when he says we have been slow to this and we want to give ourselves a bit of time and space because these are complicated matters. That is simply not acceptable. I do not accept his argument.
This is a levy that we are introducing on unfair profits. These are super-excess profits that were earned by energy companies during the period of a war. We are levying them at 75% of the excess profits and we expect to collect that levy. I fully trust that the Revenue will be capable of collecting this money, as it has certainly proven itself capable. It is a very large bill. The companies from which the money will be collected have very large fixed assets in this country. They are not fly-by-night operators. They are going to have to pay. If they do not pay within the specified dates, they will be due for excess charges, which will be in the millions of euro. We must remember that we are collecting hundreds of millions of euro from a very small number of companies, so any late payment outside the timeframes set out will result in multimillion euro excess charges. No company could rationally decide to pay late based on these timeframes.
At the same time, I need to be proportionate in the legislation to ensure it is not challenged. It needs to be legally robust and strong legislation that is effective and does not fall down because it is challenged on the basis of being disproportionate. I expect that a 50% excess charge on profits as a late fee could be challenged and could risk the entire operation.
Amendment put and declared lost.
I move amendment No. 13:
In page 15, to delete line 17 and substitute the following:
"
|
Return not delivered between 2 and 6 months from the specified date |
10 per cent |
".
Amendment put:
The Committee divided: Tá, 54; Níl, 74; Staon, 0.
Tá
- Andrews, Chris.
- Bacik, Ivana.
- Boyd Barrett, Richard.
- Brady, John.
- Browne, Martin.
- Buckley, Pat.
- Cairns, Holly.
- Canney, Seán.
- Carthy, Matt.
- Clarke, Sorca.
- Collins, Joan.
- Collins, Michael.
- Conway-Walsh, Rose.
- Cronin, Réada.
- Crowe, Seán.
- Cullinane, David.
- Donnelly, Paul.
- Ellis, Dessie.
- Fitzpatrick, Peter.
- Funchion, Kathleen.
- Gannon, Gary.
- Gould, Thomas.
- Guirke, Johnny.
- Harkin, Marian.
- Healy-Rae, Danny.
- Healy-Rae, Michael.
- Howlin, Brendan.
- Kerrane, Claire.
- Mac Lochlainn, Pádraig.
- McGrath, Mattie.
- Mitchell, Denise.
- Murphy, Catherine.
- Murphy, Verona.
- Nash, Ged.
- Naughten, Denis.
- Nolan, Carol.
- O'Callaghan, Cian.
- O'Rourke, Darren.
- Ó Broin, Eoin.
- Ó Laoghaire, Donnchadh.
- Ó Murchú, Ruairí.
- Ó Ríordáin, Aodhán.
- Ó Snodaigh, Aengus.
- Pringle, Thomas.
- Quinlivan, Maurice.
- Ryan, Patricia.
- Sherlock, Sean.
- Shortall, Róisín.
- Stanley, Brian.
- Tóibín, Peadar.
- Tully, Pauline.
- Ward, Mark.
- Whitmore, Jennifer.
- Wynne, Violet-Anne.
Níl
- Brophy, Colm.
- Browne, James.
- Bruton, Richard.
- Burke, Colm.
- Burke, Peter.
- Butler, Mary.
- Byrne, Thomas.
- Cahill, Jackie.
- Calleary, Dara.
- Cannon, Ciarán.
- Carroll MacNeill, Jennifer.
- Chambers, Jack.
- Collins, Niall.
- Costello, Patrick.
- Coveney, Simon.
- Cowen, Barry.
- Crowe, Cathal.
- Devlin, Cormac.
- Dillon, Alan.
- Donnelly, Stephen.
- Duffy, Francis Noel.
- Durkan, Bernard J.
- English, Damien.
- Feighan, Frankie.
- Flaherty, Joe.
- Flanagan, Charles.
- Fleming, Sean.
- Foley, Norma.
- Grealish, Noel.
- Griffin, Brendan.
- Harris, Simon.
- Haughey, Seán.
- Heydon, Martin.
- Higgins, Emer.
- Humphreys, Heather.
- Kehoe, Paul.
- Lahart, John.
- Lawless, James.
- Leddin, Brian.
- Madigan, Josepha.
- Martin, Micheál.
- Matthews, Steven.
- McAuliffe, Paul.
- McConalogue, Charlie.
- McEntee, Helen.
- McGrath, Michael.
- McGuinness, John.
- McHugh, Joe.
- Moynihan, Aindrias.
- Murnane O'Connor, Jennifer.
- Naughton, Hildegarde.
- Noonan, Malcolm.
- O'Brien, Darragh.
- O'Brien, Joe.
- O'Callaghan, Jim.
- O'Connor, James.
- O'Dea, Willie.
- O'Donnell, Kieran.
- O'Dowd, Fergus.
- O'Gorman, Roderic.
- O'Sullivan, Christopher.
- O'Sullivan, Pádraig.
- Ó Cathasaigh, Marc.
- Ó Cuív, Éamon.
- Phelan, John Paul.
- Rabbitte, Anne.
- Richmond, Neale.
- Ring, Michael.
- Ryan, Eamon.
- Smith, Brendan.
- Smyth, Niamh.
- Smyth, Ossian.
- Stanton, David.
- Troy, Robert.
Staon
Tellers: Tá, Deputies Darren O'Rourke and Maurice Quinlivan; Níl, Deputies Hildegarde Naughton and Cormac Devlin.
Amendment declared lost.
I move amendment No. 14:
In page 15, after line 17, to insert the following:
"
|
Return not delivered after 6 months from the specified date |
50 per cent |
".
Amendment put and declared lost.
Section 17 agreed to.
Sections 18 to 22, inclusive, agreed to.
Amendments Nos. 15 and 16 have been ruled out of order
Amendments Nos. 15 and 16 not moved.
Section 23 agreed to.
Sections 24 to 26, inclusive, agreed to.
Amendment No. 17 has been ruled out of order.
Amendment No. 17 not moved.
Schedule agreed to.
Amendments Nos. 18 and 19 have been ruled out of order.
Amendments Nos. 18 and 19 not moved.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.