asked the Minister for Finance if he will consider the possibility of imposing a tax on petrol and diesel as an alternative to the present method of taxing cars and commercial vehicles.
Ceisteanna—Questions. Oral Answers. - Petrol and Diesel Tax.
33.
While the taxation system in general is subject to continuing review, I would point out that, if the change in question were effected, the Road Fund would be deprived of its present revenue from motor taxation for road works; tax on petrol and diesel would go to the Exchequer and the amount to be voted for roads would depend on the overall level of Exchequer revenue and the urgency of calls on that revenue for services other than roads. Moreover, because of the large increase in the price of petrol it would involve, the change could have many repercussions within the economy and could have serious implications for tourism.
Surely the Minister is aware that this system has been adopted successfully in the US and surely it is not beyond the bounds of possibility to make it applicable here. Will the Minister not agree that in a recent survey it was found in a certain area that 30 per cent to 35 per cent of the cars were not taxed? My suggestion would constitute a scheme whereby there could be no evasion of tax. The Minister said it would interfere with tourism. Seeing that means can be devised to give special-rate diesel to farmers, surely it would not be beyond the bounds of possibility to arrange to have a special concession for tourists, or a special type of petrol?
Red.
First of all the system we use is used in France, Belgium, the Netherlands, West Germany, Sweden and New Zealand. There are arguments on both sides—I freely admit that—as to which is the more effective system. However, one consequence of adopting the system suggested by the Deputy would certainly be a substantial increase in the price of petrol. This could have considerable economic effects. If I give just as an example the consequences for commercial vehicles, the increased cost which would be passed on to the consumer in the goods they sell. There is also the increased risk of smuggling from across the Border. In regard to a special rate for tourists, this presents very considerable difficulties and I am sure the Deputy will remember that there was such a scheme in operation for tourists some years ago in France but it is not in operation any more.
It should not be necessary to increase the price of petrol to a greater extent——
The Deputy is indulging in argument. We have many questions to deal with and I would ask him to allow questions to proceed.
The increase would be approximately 8p in the gallon. This is not allowing for any drop in consumption because of the increased price.