Dáil Éireann Debate, Tuesday - 27 June 2023
207. Deputy Christopher O'Sullivan asked the Minister for Finance if he intends to increase the tax exemption of €200 per year on the income received by domestic micro-generators from their suppliers by way of the CEG. [30900/23]
View answerMicro-generation of electricity is the small-scale production of electricity by consumers who generate electricity at their own homes for their own consumption and sell the excess electricity produced. Section 216D in the Taxes Consolidation Act 1997 provides for an exemption of up to €200 from income tax, USC and PRSI for certain profits arising to a qualifying individual who generates energy from renewable, sustainable or alternative energy sources for their own consumption. The profits which are exempted are those from the generation of residual electricity at an individual’s qualifying residence from 1 January 2022 until 31 December 2024. Any income in excess of this €200 which is earned from micro-generated electricity must be declared by the individual on their annual tax return and will be subject to income tax, USC and PRSI in the usual manner. The exemption is available to any individual who is the electricity bill payer, and who resides in the property. If there are two or more people named on the electricity bill, each person may avail of the €200 exemption. The aim of the tax exemption is to remove the potential administrative barrier that could be created by the declaration and payment of tax on a relatively modest amount of income earned from the micro-generation of electricity from renewable, sustainable or alternative forms of energy. The €200 disregard was set to ensure that the majority of domestic renewables self-consumers, who typically have an installation of below 6kW, will pay no tax on income from this source. It is not intended to act as a financial incentive in and of itself. With regard to income, it is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation. Ireland has a progressive income tax system which is structured such that the more income you have, the more tax you pay. As a person’s income increases they move up through the various rates and bands and, as a result, while the levels of net pay increase overall, the amount of tax they pay also increases. While decisions regarding taxation measures are usually made in the context of the annual Budget and Finance Bill process, I currently do not have any plans to increase the amount of the disregard.
