Dáil Éireann Debate, Tuesday - 27 June 2023
219. Deputy Richard Boyd Barrett asked the Minister for Finance to provide a full-year estimate of the revenue that would be generated by introducing a levy of 33% on commercial aviation fuel; and if he will make a statement on the matter. [31005/23]
View answer220. Deputy Richard Boyd Barrett asked the Minister for Finance to provide a full-year estimate of the revenue that would be generated if Ireland imposed the European Commission’s proposed tax on aviation fuel in Budget 2023; where that tax will be imposed on all flights, including executive and corporate flights; and if he will make a statement on the matter. [31006/23]
View answerI propose to take Questions Nos. 219 and 220 together.
Ireland’s excise duty treatment of fuel used for air navigation is governed by European Union (EU) law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive (ETD). The provisions of the current ETD relating to aviation fuels are transposed into national law in Finance Act 1999 (as amended), which provides for the application of excise duty in the form of Mineral Oil Tax (MOT) to liquid fuels used for motor and heating purposes.
Under the current ETD, Member States must tax all fuels used for non-commercial aviation purposes. In line with EU law, MOT is applied to light oil (aviation gasoline) and heavy oil (jet fuel/Jet A1/jet kerosene) used for private pleasure flying. Private pleasure flying is defined as the use of an aircraft by its owner or the natural or legal person who enjoys the use either through hire or through any other means, for other than commercial purposes and, in particular, other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of public authorities. The current rate of MOT for light oil used for private pleasure flying is €532.12 per 1,000 litres and for heavy oil is €466.10 per 1,000 litres.
With regard to light oil used for commercial air navigation, the current ETD gives Member States the option to fully or partially relieve the relevant excise duty. MOT law currently provides for a partial exemption for aviation gasoline used for all commercial air navigation and an effective rate of €299.85 per 1,000 litres applies.
Heavy oil is the most commonly used fuel type in commercial air navigation and the ETD currently obliges all Member States to exempt heavy oil used for intra-Community and international air transport purposes. A Member State may waive this exemption for intra-community flights but only where it has entered into a bilateral agreement with another Member State to tax fuel. No such agreements are currently in place across the EU. Regarding heavy oil used for commercial domestic air navigation, the ETD allows Member States to exempt such fuel use fully or partially. Currently, Ireland’s MOT law provides for a full MOT relief for heavy oil used for all commercial air navigation, including domestic, intra-community, and international.
With regard to the estimates the Deputy has requested, Revenue does not have the data required to provide these. The EU Commission proposal to revise the ETD proposes a phased introduction of mandatory fuel taxation for commercial aviation for intra EU flights. It is currently not possible to disaggregate fuel volumes data by use for domestic, intra EU or international flights. Furthermore, Revenue does not have the necessary price data relating to commercial aviation fuels that would enable it to generate an estimate for the amount of revenue that would accrue from the introduction of a 33% ad valorem levy on aviation fuel.
