Joe Flaherty
Question:249. Deputy Joe Flaherty asked the Minister for Finance if he will consider a tapered carbon tax which would reward companies that are earnestly reducing their carbon footprint (details supplied). [54875/23]
View answerTuesday, 12 December 2023
Questions (249)
Written answers
Government policy with regard to greenhouse gas emissions and taxation is based on the polluter-pays principle, whereby high emission energy products, fuels or vehicles are subject to the highest levels of taxation. National taxation measures are reviewed and examined as part of the annual budgetary cycle and policy options are published in the Tax Strategy Group papers. As set out in the Budget 2023 Tax Strategy Group Paper on Climate Action and Tax, the policy challenge in addressing climate change involves striking the appropriate balance between incentivising uptake of cleaner fuels and technology whilst protecting the more vulnerable in society from energy and transport poverty.
National measures which address high emitting behaviours include the carbon tax, fuel excise and vehicles taxes, which operate on a polluter pays principal. Since 2020 additional revenue raised from increases in the carbon tax is allocated for expenditure measures which ensure a Just Transition including funding targeted social welfare interventions and community energy efficiency investment. Consistently, internal Government analysis using the SWITCH model has found that the increases in the carbon tax have been progressive as a result of the increased social protection payments funded by the carbon tax.
My Department is committed to its role in using taxation as one of the policy levers which can contribute to Ireland meeting our emission reduction targets. Tax policy with regard to behavioural change, and emissions, is kept under review as part of the Tax Strategy Group (TSG) and Budgetary cycle.