Damien English
Ceist:18 Mr. English asked the Tánaiste and Minister for Enterprise, Trade and Employment the impact she views the introduction of carbon taxes will have on competitiveness in industry. [24563/03]
Written Answers. - Carbon Tax.
The proposed introduction of carbon tax is in response to our international obligations under the Kyoto Protocol to reduce emissions of greenhouse gases. Taxation is one of the measures included in the Government's national climate change strategy, which sets out a framework of mechanisms to help Ireland meet its international commitment.
In his budget speech in December 2002, the Minister for Finance signalled the introduction of a general carbon tax from the end of 2004. The Minister indicated that full consultation with interested parties on the design of the tax would be undertaken and, to facilitate that consultation, the Department of Finance published a consultation paper on proposals for a carbon energy tax in Ireland on 30 July 2003. I understand that the submissions received in response to the consultation paper are currently being studied by the Department of Finance with a view to framing measures as part of the 2005 budget. The impact of the introduction of carbon taxes on the competitiveness of industry will obviously be influenced by the design of the tax measures.
My Department has provided a submission as part of the consultation process and will continue to be fully involved in the development process. In its submission, my Department has made it clear that, in developing the tax framework, a crucial consideration must be the minimisation of any impact on competitiveness. To that end, my Department has argued that companies, which are participating in other greenhouse gas reduction measures such as emissions trading or legally binding negotiated agreements, should be exempted from the tax. It is also critical that the level of tax must be balanced between the objectives of achieving appropriate realistic reductions in greenhouse gas emissions and realising these reductions at least cost, thereby maintaining competitiveness in the enterprise sector. In addition, it is essential that the definitive starting date and rates for the tax should be announced well in advance to facilitate proper planning by industry.