Dáil Éireann Debate, Wednesday - 22 May 2024
59. Deputy Brendan Griffin asked the Minister for Finance if he will reconsider plans to reintroduce further excise increases on fuel later this year; if tax receipts from fuel are ahead of schedule to date in 2024; if so, by how much; if he will provide a breakdown of actual income versus projected income, per category; and if he will make a statement on the matter. [23302/24]
View answerThe Government is conscious of the implications of fuel costs for all sectors of society. This is reflected in the fact that in 2022, in light of the acute impact rising prices were having on households and businesses, the Government provided for temporary cuts in excise rates which, inclusive of VAT amounted to 21 cents, 16 cents and 5.4 cents per litre on petrol, auto-diesel and marked gas oil, respectively.
These temporary cuts to excise rates were initially due to end on 31 August 2022, but following review and monitoring of fuel prices, were extended until February 2023, with a phased restoration of rates occurring in June and September 2023. A final restoration of excise rates was due to take place on 31 October 2023, but Budget 2024 provided for further extension until 31 March 2024, with phased restoration occurring in April and August 2024. The first of these restorations took place on 1 April 2024 adding 4 cent per litre to petrol, 3 cent to auto diesel and 1.7 cent to MGO.
Carbon tax rate increases on petrol and auto-diesel are legislated to occur on 9 October 2024 when the rate of carbon tax will increase from €56 to €63.50 per tonne of carbon dioxide emitted. This will add 2.1 cent per litre of petrol and 2.5 cent per litre of auto diesel, VAT inclusive. Carbon tax increases are implemented annually under the 10-year carbon tax trajectory that was introduced in Finance Act 2020. The 2020 Programme for Government committed to increasing the amount that is charged per tonne of carbon dioxide emissions from fuels to €100 by 2030, and the 10-year trajectory of carbon tax increases delivers on that commitment. The commitment also features as one of the nine reform measures in Ireland’s National Recovery and Resilience Plan.
While I recognise that households and business continue to face challenges, the Government must strike the appropriate balance between providing support and avoiding fuelling cyclical inflationary trends. The Government has provided relief to consumers and businesses since 2022 through a number of support measures including temporary reductions in excise. However, these measures were introduced as temporary support measures and involve an ongoing cost to the exchequer while they are retained.
I am advised by Revenue that the provisional year to date (January – April) excise receipts for Mineral Oil Tax (MOT), Solid Fuel Carbon Tax (SFCT), Natural Gas Carbon Tax (NGCT) and an estimate of VAT receipts in respect of fuels are provided in the table below. The Deputy should note that while Budgetary projections for overall excise annual receipts between 2022 and 2026 are published in the Budget 2024 Economic and Fiscal Outlook which is available on www.budget.gov.ie,the particular level of detail requested is not available.
In relation to VAT, I am further advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide the VAT yield on fuel using taxpayer information alone. However, using Revenue and third-party data sources, a tentative estimate of the VAT generated on fuel is provided below.
|
January – April 2024 |
|
|
MOT Receipts €m |
904.5 |
|
SFCT Receipts €m |
11.9 |
|
NGCT Receipts €m |
57.3 |
|
Estimated VAT Receipts €m* |
304.1 |
|
Total Receipts €m |
1,277.8 |
*estimated VAT receipts are for January to March.
Finally, the Deputy should note that I will continue to monitor and review the position in the coming weeks in the context of the final phase of excise rate restorations due to take place in August 2024.
