Written Answers Nos. 259-278
260. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of reducing excise duty on home heating oil to €0 per 1,000 litres to the end of August 2022 and the end of December 2022 respectively. [15953/22]
View answer261. Deputy Pearse Doherty asked the Minister for Finance the minimum levels of excise duty that may apply to petrol, diesel and home heating oil respectively in accordance with the EU Energy Directive; the current rates that apply to each; and the estimated cost of reducing each to the minimum allowable levels to end of August 2022 and the end of December 2022 respectively. [15954/22]
View answerI propose to take Questions Nos. 260 and 261 together.
Ireland’s taxation of fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. ETD provisions on mineral oils are transposed into national law in Finance Act 1999 (as amended). Finance Act 1999 provides for the application of excise duty, in the form of Mineral Oil Tax (MOT), to specified mineral oils, such as petrol, diesel, and kerosene, that are used as motor or heating fuels. MOT is comprised of a non-carbon component and a carbon component. The carbon component is commonly referred to as carbon tax and the non-carbon component is often referred to as “excise”, “fuel excise” or “fuel duty”. In complying with ETD minimum rates, total MOT rates are taken into account.
I will deal with the Deputy’s questions regarding MOT rates and ETD minimum rates for each of the fuel types individually.
Firstly, in relation to petrol the Deputy will be aware that, in response to the current fuel crisis, I recently introduced a significant reduction in the MOT rate effective from 10 March this year until the end of August. Inclusive of VAT this cut amounts to 20 cents on each litre of petrol. I also brought forward legislation in Finance Act 2021 to provide for a temporary reduction of 1 cent per litre inclusive of VAT to MOT on petrol. This reduction is to come into effect on 1 April and will run to 11 October this year. I took this step to partially offset the expected rise in fuel costs arising from an increase in the Biofuel Obligation for transport fuels proposed by my colleague the Minister for Transport. MOT rates on petrol are summarised in the table below, along with comparisons with the ETD minimum rate.
|
Petrol rates/1,000L from |
MOT non-carbon |
MOT carbon |
Total MOT |
ETD minimum |
MOT > ETD min by |
|
13-Oct-21 |
€541.84 |
€94.87 |
€636.71 |
€359.00 |
€277.71 |
|
10-Mar-22 |
€379.24 |
€94.87 |
€474.11 |
€359.00 |
€115.11 |
|
01-Apr-22 |
€371.11 |
€94.87 |
€465.98 |
€359.00 |
€106.98 |
|
01-Sep-22 |
€533.71 |
€94.87 |
€628.58 |
€359.00 |
€269.58 |
|
12-Oct-22 |
€541.84 |
€112.23 |
€654.07 |
€359.00 |
€295.07 |
With regards to auto-diesel, I recently introduced a reduction of 15 cents inclusive of VAT to the MOT rate effective from 10 March through to the end of August. This is in addition to the temporary reduction of 1 cent per litre inclusive of VAT, to offset biofuel costs, provided for in Finance Act 2021 and to come into effect on 1 April until 11 October this year. These rate changes are summarised in the table below, along with comparisons with the ETD minimum rate.
|
Auto-diesel rates/1,000L from |
MOT non-carbon |
MOT carbon |
Total MOT |
Effective MOT incl. DRS |
ETD minimum |
MOT rate > ETD min. by |
Effective MOT > ETD min. by |
|
13-Oct-21 |
€425.72 |
€109.74 |
€535.46 |
€460.46 |
€330.00 |
€205.46 |
€130.46 |
|
10-Mar-22 |
€303.77 |
€109.74 |
€413.51 |
€338.51 |
€330.00 |
€83.51 |
€8.51 |
|
01-Apr-22 |
€295.64 |
€109.74 |
€405.38 |
€330.38 |
€330.00 |
€75.38 |
€0.38 |
|
01-Sep-22 |
€417.59 |
€109.74 |
€527.33 |
€452.33 |
€330.00 |
€197.33 |
€122.33 |
|
12-Oct-22 |
€425.72 |
€129.81 |
€555.53 |
€480.53 |
€330.00 |
€225.53 |
€150.53 |
It is important to note that the effective MOT rate on auto-diesel that must be considered in ensuring compliance with the ETD includes the maximum MOT rate repayable under the Diesel Rebate Scheme (DRS), currently €75.00/1,000 litres. This means that the current effective MOT rate on auto-diesel is only marginally above the ETD minimum. From 1 April until 1 September 2022 the difference between the ETD minimum and the effective MOT rate on auto-diesel will be negligible; €0.38/1,000 litres or 0.038 cents/litre.
Kerosene used for heating purposes attracts a reduced rate of MOT which is comprised entirely of a carbon component. The ETD minimum rate of taxation on kerosene used for heating purposes is set at zero. When introducing the 10-year carbon tax trajectory in 2020, I deliberately scheduled rate changes on heating fuels to come into effect at the end of the winter heating season. Therefore, the next scheduled increase in the carbon component of MOT on non-propellant fuels such as kerosene will come into effect on 1 May. The current kerosene MOT rate, the rate effective for one year from 1 May 2022 and comparison with the ETD minimum are set out in the table below.
|
Kerosene rates/1,000L from |
MOT non-carbon |
MOT carbon |
Total MOT |
ETD minimum |
MOT > ETD min by |
|
01-May-21 |
€0.00 |
€84.84 |
€84.84 |
€0.00 |
€84.84 |
|
01-May-22 |
€0.00 |
€103.83 |
€103.83 |
€0.00 |
€103.83 |
Finally, while kerosene is the predominant oil used for heating, gas oil (diesel) is also used. Where gas oil is used for heating the ETD minimum tax rate is €21.00 per 1,000 litres. Gas oil that qualifies for a reduced rate of MOT is marked green and is usually referred to as Marked Gas Oil (MGO) or green diesel. When providing for cuts to MOT rates earlier this month I reduced the rate on MGO by 2 cents per litre inclusive of VAT from 10 March. I also provided for the overall rate on MGO to be set at the 2021 level from 1 May until the end of August this year, instead of an increased rate legislated for in Finance Act 2020. These rates are detailed in the table below with ETD comparisons.
|
MGO rates/1,000L from |
MOT non-carbon |
MOT carbon |
Total MOT |
ETD minimum |
MOT > ETD min by |
|
01-May-21 |
€47.36 |
€90.81 |
€138.17 |
€21.00 |
€117.17 |
|
10-Mar-22 |
€29.74 |
€90.81 |
€120.55 |
€21.00 |
€99.55 |
|
01-May-22 |
€27.03 |
€111.14 |
€138.17 |
€21.00 |
€117.17 |
|
01-Sep-22 |
€47.36 |
€111.14 |
€158.50 |
€21.00 |
€137.50 |
|
12-Oct-22 |
€47.36 |
€111.14 |
€158.50 |
€21.00 |
€137.50 |
I am advised by Revenue that the cost of reducing MOT on petrol, auto-diesel, heating kerosene and MGO to the relevant ETD minima for periods to the end of August 2022 and to the end of December 2022 are estimated at the amounts set out in the table below. The estimated costs of reducing MOT on auto-diesel are based on effective MOT rates to end 2022 which take account of the maximum DRS repayment rate of €75.00/1,000 litres. As taxpayers are not required to provide details of their economic activity or supplies in their periodic tax returns it is not possible to provide the actual VAT loss due of these reductions. However, using tax returns and third-party data an estimate of the VAT loss is provided in the table below.
|
Period |
Petrol €m |
Auto-diesel €m |
Kerosene €m |
MGO €m |
VAT €m |
Total (VAT & MOT) €m |
|
To end August 2022 |
45 |
1 |
26 |
62 |
13 |
147 |
|
To end December 2022 |
132 |
176 |
74 |
114 |
44 |
540 |
I am further advised by Revenue that these estimates are based on levels of consumption in 2021, projected forward based on growth rates as anticipated by my Department in Budget 2022. Therefore, they may not fully reflect the current levels of uncertainty in the market for fuels. MGO is used for non-heating purposes, such as in agricultural tractors, and data broken down by usage type is not available. Therefore, the estimates for reducing MOT on MGO reflect all qualifying uses.
MOT receipts, including both carbon and non-carbon components, for all mineral oils for the years 2017 to 2020 are published on the Revenue website at: www.revenue.ie/en/corporate/documents/statistics/excise/net-receipts-by-commodity.pdf.
Current MOT rates for mineral oils and vehicle gas are published on the Excise Duty rates page on Revenue’s website. Further details, including rates prior to 10 March 2022, are available in the Tax and Duty Manual on Excise Duty Rates on Energy Products and Electricity which is also published on Revenue’s website.
262. Deputy Pearse Doherty asked the Minister for Finance the number of communications he or his Department have had with the European Commission with respect to the rate of VAT applied to fuels and household energy bills since 1 November 2021; and if he will make a statement on the matter. [15956/22]
View answerAs the Deputy will be aware officials in my Department and their colleagues in Brussels are in frequent contact with the European Commission across a wide range of issues. Discussions may include direct bilateral contact as well as engagement at Working Parties, High Level Working Parties and at Coreper. In addition, as Minister for Finance and President of the Eurogroup I engage directly with the Commission, particularly in preparation for Eurogroup and ECOFIN meetings. The cost of living, particularly the impact of the current energy crisis, is discussed frequently, including measures to alleviate the costs faced by consumers across Europe.
In relation to written correspondence, following conversations between my officials and their counterparts in the Commission I wrote to Commissioner Gentiloni on 10 March 2022 regarding the need for Member States to have even greater flexibility when responding the energy crisis, particularly in relation to the VAT and Excise Directives.
263. Deputy Richard Bruton asked the Minister for Finance if he receives regular reports on the speed of processing tax claims by the Revenue Commissioners and on the number of phone calls to their network which fail to be answered; if his attention has been drawn to problems in these respects in recent times; and if he will make a statement on the matter. [16004/22]
View answerI am advised that the Deputy’s question relates to PAYE taxpayers. Revenue has advised me that most PAYE income tax returns are submitted online and any refunds due are generally paid to the taxpayer’s bank account within three to five working days. Exceptions may occur where an income tax return is selected for further checking or where Revenue needs to contact the taxpayer to request further information in support of a claim. Paper returns are processed manually and may take slightly longer.
Regarding the numbers of calls to the PAYE Helpline, Revenue has advised that the peak period for this service occurs during the early months of the year (January to April) when taxpayers submit their income tax returns for the previous year/s, claim any refunds or reliefs to which they are entitled, and check their tax credits for the current year. The service is currently answering between 3,500 and 4,500 calls per day while also responding to between 4,500 and 6,000 correspondence items per day. It is expected that the number of calls to the PAYE Helpline will reduce over the coming weeks as the peak period passes.
To date in 2022, Revenue has processed over 835,000 income tax returns for PAYE taxpayers, answered over 175,000 calls to the PAYE Helpline, and dealt with over 300,000 items of correspondence. These calls and correspondence items relate to a broad variety of topics, including requests for assistance in completing the income tax return, clarifying a person’s tax position for 2022 and requesting changes to personal details held on Revenue’s records.
Finally, if the Deputy is aware of a particular case that is experiencing delays, he should advise Revenue of the details via the Oireachtas Helpline so that the matter can be investigated and followed up as necessary with the taxpayer.
264. Deputy Darren O'Rourke asked the Minister for Finance if he plans to allow bus and coach operators reclaim VAT on fuel costs; if his attention has been drawn to the fact that the competitive advantage that operators from the Northern Ireland have in this regard; and if he will make a statement on the matter. [16047/22]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate or exemption from VAT. In addition, the Directive allows for historic VAT treatment to be maintained under certain conditions and Ireland has retained the application of VAT exemption to the transport of passengers and their accompanying baggage. This means that the supplier does not register for VAT, does not charge VAT on the supply of their services and has no VAT recovery entitlement on costs where such costs are used for the exempt supply of passenger transport.
Ireland may continue to apply the VAT exemption on the supply of domestic passenger transport as governed by Article 371 of the VAT Directive; however, it cannot change the conditions under which the exemption was granted. In accordance with the Directive, a reduced rate of VAT (Ireland currently has two reduced VAT rates, 9% and 13.5%) could be introduced to the supply of passenger transport in place of the exemption that currently applies; this would give the transport operator deductibility in relation to VAT on their business inputs but would involve charging passengers VAT on their fares.
In relation to Northern Ireland, the UK continues to apply the zero rate of VAT to the supply of passenger transport, with the exception of a taxi service which is standard rated, and suppliers established in the UK have an entitlement to deductibility on the costs relating to the supply of these services where the place of supply is the UK. This was a historic standstill provision for only the UK and could not be availed of by Ireland or other Member States. In addition, as the UK is no longer part of the EU, their VAT rates are not subject to the VAT Directive.
265. Deputy Pauline Tully asked the Minister for Finance the number of vacancies by job title currently in the Office of Comptroller and Auditor General; when it is planned to fill each of these vacancies in tabular form; and if he will make a statement on the matter. [16128/22]
View answerThe Office of the Comptroller and Auditor General is a body under the aegis of my Department and is an equal opportunities employer. Its recruitment and promotion activity is undertaken in accordance with the Public Service Management (Recruitment and Appointments) Act 2004 and the code of practice issued by the Commission on Public Service Appointments.
I am informed by the Office of the Comptroller and Auditor General that vacancies are monitored on an ongoing basis and recruitment competitions arranged to ensure they are filled in a timely manner.
It has provided the information requested by the Deputy as follows:
|
Vacancies at end Feb 2022 |
When vacancies will be filled |
|
Deputy Director (1) |
Successful candidate from recent open competition due to commence on 11 April 2022. |
|
Audit Manager (5) |
An internal competition is in progress, with interviews scheduled to take place over the coming week. Successful candidates will be appointed during April. An open competition is due to be advertised shortly. The estimated appointment date for successful candidates is the end of June. |
|
Auditor (5) |
Open competition completed in recent weeks, with two successful candidates. They are due to start on 28 March and 16 May. Internal competition due to be advertised in mid-April. It is estimated that successful candidates would be appointed in June. |
|
Trainee Auditor (13) |
An open competition is in progress. Interviews are scheduled to commence on 4 April. It is estimated that successful candidates would be appointed in June. |
266. Deputy Sean Sherlock asked the Minister for Finance the number of retainers his Department has with outside organisations; and the cost of each retainer in tabular form. [16150/22]
View answerI can advise the Deputy that my Department does not have retainers with any outside organisations.
267. Deputy Matt Carthy asked the Minister for Finance further to Parliamentary Question No. 63 on 9 March 2022, if the Revenue Commissioners intend to update to section 5 of part 23-01-36 in order that the example provided brings clarity to farmers regarding their own calculations of the available rebate in the coming period; and if he will make a statement on the matter. [16170/22]
View answerI am informed by Revenue that Tax and Duty Manuals are regularly reviewed, and updated examples included where necessary to provide clarity to taxpayers. Tax and Duty manual 23-01-36 provides an overview of how relief for the increase in the carbon tax on farm diesel operates, as is provided for by section 664A Taxes Consolidation Act 1997.
The relief operates by allowing farmers, in computing their taxable farming profits, to claim a deduction for farm diesel in an amount equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at the rate of €41.30 per 1,000 litres of farm diesel (the 2012 baseline). This deduction is in addition to being able to claim a tax deduction for expenditure incurred on farm diesel (including any carbon tax charged in respect of the diesel.)
The “carbon tax” referred to in section 664A is the carbon component of Mineral Oil Tax for farm diesel, which was introduced on 1 May 2010. The rate of the charge was last increased on 1 May 2021 and is to increase again on 1 May 2022. I am informed by Revenue that it has updated Tax and Duty manual 23-01-36 to provide an additional example to demonstrate how the relief operates using the current rate of the carbon charge component. The updated manual is available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-23/23-01-36.pdf.
268. Deputy Matt Carthy asked the Minister for Finance the amount raised through the carbon tax to date by year in tabular form; and if he will make a statement on the matter. [16172/22]
View answerCarbon Tax receipts are published on the Revenue website at link: www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/excise-receipts-commodity.aspx
This includes a breakdown of receipts by commodity, from the introduction of Carbon Tax in 2010 up to 2020. I am advised by Revenue that the provisional amounts raised through the Carbon Tax in 2021 (to be finalised shortly) and to the end of February 2022 are €652 million and €136 million respectively.
269. Deputy Carol Nolan asked the Minister for Finance the external consultancy organisation or provider which delivered diversity and inclusion training within his Department in each of the years 2018 to 2021 and to date in 2022; the costs associated with such services; and if he will make a statement on the matter. [16374/22]
View answerI wish to inform the Deputy that the below table sets out the providers of diversity and inclusion training in the Department for years 2018 to 2021 and to date in 2022 and the costs associated with same.
|
Year |
Provider |
Cost |
No. of Participants |
|
2018 |
CMC Business Psychology |
€5,610.26 |
53 |
|
2021 |
The Hobbs Consultancy |
€12,704.36 |
126 |
|
2022 |
The Hobbs Consultancy |
€9,770.02 |
Dates planned for Q2 and Q4 2022 |
270. Deputy Sorca Clarke asked the Minister for Finance if the senior executive accountability regime to deliver heightened accountability with the banking system as outlined in the Programme for Government has been established; if a report has been published; and if he will make a statement on the matter. [16391/22]
View answerThe Senior Executive Accountability Regime (SEAR) is a key element of the Central Bank (Individual Accountability Framework) Bill which will drive positive changes in terms of culture, greater delegation of responsibilities, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles.
The General Scheme of the Central Bank (Individual Accountability Framework) Bill was approved by Government and published on the Department's website in July 2021;
(www.gov.ie/en/press-release/4f16e-minister-donohoe-secures-agreement-to-draft-central-bank-individual-accountability-framework-bill).
My officials are working closely with the Office of the Parliamentary Counsel on the drafting of the Bill, which is at an advanced stage. It is a complex piece of legislation which has had to be extensively adapted to take account of the Supreme Court's decision in Zalewski v. Adjudication Officer and Others.
The General Scheme is also currently undergoing Pre-Legislative Scrutiny by the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach and I await the report from the Committee which I hope to see soon.
The Bill will provide greater levels of accountability, which will lead to better outcomes across the sector:
- Customers will benefit from financial service providers being fully accountable for the service and advice they provide;
- Employees of financial institutions will benefit from greater clarity as to their role and responsibilities, and will be empowered to speak up when they see failings;
- Firms and their shareholders will benefit through having senior executives personally accountable for their actions and inaction; and
- The wider economy and society will benefit from a more stable financial system by reducing the scope for reckless decisions.
I have agreed that SEAR will initially apply to banks, insurance companies, and other sectors that have a high degree of interaction with retail consumers including:
- Credit institutions (excluding credit unions);
- Insurance undertakings (excluding reinsurance undertakings, captive (re)insurance undertakings and Insurance Special Purpose Vehicles);
- Investment firms which underwrite on a firm commitment basis and/or deal on own account and/or are authorised to hold client monies/assets; and
- Third country branches of the above.
Accountability of senior staff in these sectors will lead to better outcomes for customers.
SEAR will provide a regime with the following features:
- Specific senior executives in firms will be designated as carrying out Senior Executive Functions;
- Firms will be required to provide Statements of Responsibilities to the Central Bank which will clearly set out the roles and responsibilities of each senior executive;
- Firms will also have to produce Management Responsibility Maps documenting key management and governance arrangements in a comprehensive and accessible way;
The effect of these measures will be to ensure that there is absolute clarity as to who is responsible for what. This should foster a culture of personal accountability across the sector.
Restoring public trust in the financial sector is essential, not least for the sector itself. The Central Bank (Individual Accountability Framework) Bill will provide an effective framework, and will help to reassure the public that meaningful cultural change is underway.
The aim of this regime is to allocate responsibility and prevent misdemeanour, rather than being punitive. This framework is designed to improve governance and the management of risk and outcomes for consumers.
I intend to bring the Bill to Government for approval to publish it as soon as possible.
271. Deputy Bernard J. Durkan asked the Minister for Finance if circumstances or an exemption exists whereby a first-time buyer (details supplied) can be eligible for the help-to-buy scheme; and if he will make a statement on the matter. [16453/22]
View answerThe Help-to-Buy (HTB) is an incentive for first-time property purchasers to help with the deposit needed to buy or self-build a new house or apartment as a home.
The qualifying criteria for the HTB includes that first-time purchasers must take out a mortgage with a qualifying lender that is at least 70% of the value of the property or approved valuation in the case of a self-build. The legislation does not provide for any exemption where the loan-to-value ratio is below the 70% threshold.
I am advised by Revenue that the person in question has completed the initial application stage of their claim for the HTB. However, as they have not yet completed the claim stage of the process, which includes the mortgage details, it is not known as to whether they meet the 70% loan-to-value ratio.
If the person’s loan-to-value ratio is less than the required 70% threshold, as indicated by the Deputy, then they will not qualify for the scheme. There is no provision in the legislation for any exemption to be applied in such circumstances.
272. Deputy Jackie Cahill asked the Minister for Finance if the circumstances in relation to a partnership (details supplied) meet the criteria for the taxation exemption on land leasing; and if he will make a statement on the matter. [16462/22]
View answerI am advised by Revenue as follows:
Section 664 of the Taxes Consolidation Act 1997 sets out the criteria which must be met for relief for certain income from the leasing of farmland to be allowed. Farmland must be let by a qualifying lessor under a qualifying lease to a qualifying lessee. The amount of the relief is subject to certain limitations.
A qualifying lessee may be an individual or a company provided certain other conditions are met.
The lessee must carry on a trade of farming on the leased land either solely or in partnership with a person or persons who is also a qualifying lessee on a commercial basis with a view to the realisation of profits. In addition to this requirement, a lessee must not be connected with the lessor or with any of the lessors if there is more than one. Where there is more than one lessor all the lessees must be unconnected with all of the lessors.
Connected persons is defined in section 10 of the Taxes Consolidation Act 1997 and provides that “a person shall be connected with an individual if that person is the individual’s husband, wife or civil partner, or is a relative, or the husband, wife or civil partner of a relative, of the individual or of the individual’s husband, wife or civil partner.” A relative for these purposes includes immediate family e.g. grandparents, parents, brothers, sisters, children, grandchildren, etc.
The details supplied do not set out the full particulars of the familial relationship between the parties involved and, specifically the relationship between the father and the aunt. Where the aunt is connected to the father because either she is his sister or the sister of his wife or civil partner, relief under section 664 would not be available as both the nephew and his father must be unconnected to the lessors. I am advised by Revenue that there is guidance available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-23/23-01-23.pdf, which sets out the relevant conditions of the relief and provides further details of the rules in relation to connected parties.
273. Deputy Darren O'Rourke asked the Minister for Finance if he has examined expanding the diesel rebate scheme to include other fuels such as compressed natural gas; and if he will make a statement on the matter. [16464/22]
View answer274. Deputy Darren O'Rourke asked the Minister for Finance the estimated cost of including compressed natural gas in the diesel rebate scheme; and if he will make a statement on the matter. [16465/22]
View answer275. Deputy Darren O'Rourke asked the Minister for Finance if he intends to reform the diesel rebate scheme to make it more accessible (details supplied); and if he will make a statement on the matter. [16466/22]
View answer276. Deputy Darren O'Rourke asked the Minister for Finance the cost of the diesel rebate scheme in 2018, 2019, 2020 and 2021; and if he will make a statement on the matter. [16467/22]
View answer277. Deputy Darren O'Rourke asked the Minister for Finance the estimated cost of increasing the rate of the diesel rebate scheme from 7.5 cent to €0.15, to €0.20 and €0.25; and if he will make a statement on the matter. [16572/22]
View answerI propose to take Questions Nos. 273 to 277, inclusive, together.
Ireland’s taxation of fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. ETD provisions on mineral oils are transposed into national law in Finance Act 1999 (as amended) and this Act provides for the application of excise duty, in the form of Mineral Oil Tax (MOT), to specified mineral oils that are used as motor or heating fuels. MOT is comprised of a non-carbon component and a carbon component. The carbon component is commonly referred to as carbon tax and the non-carbon component is often referred to as “excise”, “fuel excise” or “fuel duty”. It is important to note that both components of MOT are excise. Total MOT rates are what are considered in terms of compliance with ETD minimum rates.
The Diesel Rebate Scheme (DRS) was introduced in 2013 with the aim of providing support to road haulage and bus transport operators when the retail price of auto diesel is relatively high. The DRS operates as a State Aid under Commission Regulation (EU) No 651/2014, commonly referred to as the General Block Exemption Regulation. The DRS allows qualifying operators to benefit from an effective lower rate of MOT than other auto-diesel users. While this application of a differentiated MOT rate on auto-diesel for certain commercial uses is allowed under Articles 7.2 and 7.3 of the ETD, the ETD minimum rate, currently €330 per 1,000 litres, must still be complied with. This means that the effective MOT rate is what is considered in terms of compliance with ETD minimum. The effective MOT rate is determined by reducing the actual MOT rate by the maximum DRS repayment rate.
The DRS is provided for in section 99A of Finance Act 1999 and operates on a sliding scale basis, whereby a partial rebate of MOT is available when the retail price of a litre of diesel exceeds €1.00 excluding VAT. The repayment rate increases gradually as the retail price increases, up to a maximum repayment rate of 7.5 cents per litre. Budget 2020 introduced enhancements to the DRS, whereby the marginal rate of repayment was increased from 30% to 60% at prices over €1.07 per litre excluding VAT (€1.32 incl. VAT). The rate of repayment is currently capped at 7.5 cents per litre. This cap is reached when the average price of diesel, excluding VAT, is €1.16 or more per litre (€1.43 incl. VAT).
The Deputy will be aware that in response to the current fuel crisis I recently introduced a reduction of 15 cents inclusive of VAT to the auto-diesel MOT rate effective from 10 March through to the end of August. This is in addition to the temporary reduction of 1 cent per litre inclusive of VAT which was provided for in Finance Act 2021 to partially offset expected rises in biofuel costs. This MOT cut will come into effect on 1 April and run until 11 October this year. These rate changes are summarised in the table below, along with comparisons between actual and effective MOT rates and the ETD minimum rate.
|
Auto-diesel rates/1,000L from |
MOT non-carbon |
MOT carbon |
Total MOT |
Effective MOT incl. DRS |
ETD minimum |
MOT rate > ETD min. by |
Effective MOT > ETD min. by |
|
13-Oct-21 |
€425.72 |
€109.74 |
€535.46 |
€460.46 |
€330.00 |
€205.46 |
€130.46 |
|
10-Mar-22 |
€303.77 |
€109.74 |
€413.51 |
€338.51 |
€330.00 |
€83.51 |
€8.51 |
|
01-Apr-22 |
€295.64 |
€109.74 |
€405.38 |
€330.38 |
€330.00 |
€75.38 |
€0.38 |
|
01-Sep-22 |
€417.59 |
€109.74 |
€527.33 |
€452.33 |
€330.00 |
€197.33 |
€122.33 |
|
12-Oct-22 |
€425.72 |
€129.81 |
€555.53 |
€480.53 |
€330.00 |
€225.53 |
€150.53 |
As already mentioned, the maximum MOT repayment rate under the DRS is currently 7.5 cents per litre, or €75.00 per 1,000 litres. This means that the current effective MOT rate on auto-diesel is only marginally above the ETD minimum by €8.51 per 1,000 litres or 0.85 cents per litre. From 1 April until 1 September 2022 the difference between the effective MOT rate and the ETD minimum will be even less; €0.38 per 1,000 litres or 0.038 cents per litre. The Deputy will appreciate that an increase of 0.038 cents per litre in the DRS repayment rate would be negligible. Any increase beyond 0.038 cents per litre during the period from 1 April to 1 September would be incompatible with EU law.
Regarding the costs of increasing the DRS repayment rate from 7.5 cents to 15, 20 and 25 cents, as already outlined any material increase in the repayment rate is currently not permissible under the ETD. I am advised by the Revenue Commissioners that, if repayment rates of 15, 20 and 25 cents were permissible, it is estimated that the additional costs to the end of 2022 would be in the region of €30m, €50m and €70m respectively providing a total cost of €60m, €80m and €100m respectively for a full year. These estimates are based on the most recently available data and assume the average price of auto-diesel remains above €1.16 per litre excl. VAT (€1.43 incl. VAT).
The Revenue Commissioners advise that the provisional cost for the Diesel Rebate scheme for 2021 is estimated at €9.7m and costs for the years 2018 to 2020 are published on the Revenue website at the following link:
www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf
The Deputy has asked if consideration has been given to expanding the DRS to include other fuels such as compressed natural gas. Natural gas used as a propellant is subject to MOT and is referred to in legislation as vehicle gas. The current MOT rate on vehicle gas is €9.36 per megawatt hour. This rate has been in place since its introduction in 2017 and is legislated to remain in place until May 2024. Under the ETD, the minimum rate of taxation required on propellant natural gas is €9.36 per megawatt hour. Therefore, there is no scope to extend the DRS to include vehicle gas. In any event vehicle gas, unlike auto-diesel, is not covered by ETD provisions that allow for differentiated rates of taxation for commercial purposes.
The availability of the DRS is widely known across the sector. I am advised by the Revenue Commissioners that the number of operators registered for the DRS over the last four years are given in the table below along with the number of new registrations each year.
|
Year |
DRS Registrations |
New DRS Registrations |
|
2018 |
2,490 |
119 |
|
2019 |
2,581 |
93 |
|
2020 |
2,653 |
72 |
|
2021 |
2,901 |
249 |
I am further advised that the DRS is operated through Revenue Online Systems (ROS) and comprehensive details are published on Revenue’s website, including how to register and claim online, qualifying criteria and repayment rates. Under the DRS a repayment may only be made to licensed road haulage and bus transport operators who purchase diesel in the State for use, in the course of their business, in qualifying motor vehicles. Qualifying road haulage vehicles include those with a maximum permissible gross laden weight of not less than 7.5 tonnes. Qualifying passenger transport vehicles include category M2 and M3 vehicles.
When registering, applicants must provide a copy of the relevant licence and either a valid Tax Clearance Certificate issued by Revenue or written proof of tax compliance in the form of a letter from the tax authority of another Member State where the operator’s road licence was issued. Claims may only be made for auto-diesel purchased in the State in bulk (2,000 litres or more), or by using a fuel card approved by Revenue. Revenue may request supporting evidence to verify that the auto-diesel was dispensed to and used in a qualifying vehicle.
Uptake of the scheme by qualifying operators (appropriately licensed, tax cleared and using auto diesel in qualifying vehicles) is clearly driven by fuel prices. The final quarter of last year saw fuel prices rise to a point where the DRS hit the maximum repayment rate of 7.5 cents per litre. Some registered have not made claims over the past two years despite rising fuel prices, which may be partly explained by a downturn in business during the Covid-19 pandemic. I understand that Revenue is currently engaged in contacting registered operators who have not recently submitted DRS claims to remind them of the availability of the scheme. In this regard, 243 letters issued to operators in late 2021 and a further approximate 1,100 will issue in the coming weeks.
Finally, I must point out that the European Commission’s proposal for the revision of the ETD envisage the removal of some tax exemptions, reliefs and reduced rates that essentially act as fossil fuel subsidies. The ETD proposals are a key pillar of the Commission’s Fit for 55 legislative package which is aimed at reducing net greenhouse gas emissions by at least 55% by 2030.
278. Deputy Mairéad Farrell asked the Minister for Finance the total number of staff who are employed in the Central Bank; the number who are specifically employed in the Registry of Credit Unions; and if he will make a statement on the matter. [16582/22]
View answerI am informed by the Central Bank that at the end of February 2022, the Active Full-Time-Equivalent (“FTE”) was 1,982.6 staff working in the Bank.
This figure includes 42.8 Active FTE working within the Registry of Credit Unions Division.
