Dáil Éireann Debate, Tuesday - 16 November 2021
221. Deputy Neasa Hourigan asked the Minister for Finance when the planned examination of green budgeting practices from a tax perspective as per action 69 of the Climate Action Plan 2021 is due to take place; and if he will make a statement on the matter. [56021/21]
View answerThe Department of Finance commenced green budgeting analysis of tax measures in Budget 2022.
As the Deputy is aware, green budgeting is a process which seeks to consider the effects of fiscal policy and the budgetary process on the transition to a more sustainable and climate friendly economy.
The publication “A Review of Green Budgeting from a Tax Perspective” was published on Budget day along with the Budget 2022 documents, and is available on the Budget website at the following link: www.gov.ie/en/publication/7e491-taxation-measures/. This review provides a framework for undertaking green budgeting analysis of tax measures in an Irish context and analyses existing tax measures and recent budgetary changes. The green budgeting related tax measures in Budget 2022 were also identified in the ‘Budget 2022: Tax Policy Changes’ document, available at the same link.
Analysis in the report demonstrates that the tax system as a whole can be considered climate-positive, in monetary terms, and that recent budgetary changes have improved the climate-positive contribution of the tax system in these terms. This is due significantly to the climate-positive effect of tax revenue measures, which outweigh the overall climate-negative effects of tax expenditures. The review highlights the importance of identifying such climate-negative measures, though acknowledging that there may be wider societal and economic reasons why these measures were put in place.
The analysis that has been undertaken by my Department complements work undertaken by the Department of Public Expenditure and Reform with regards to green budgeting from an expenditure perspective.
