Dáil Éireann Debate, Wednesday - 23 June 2004
78 Ms Burton asked the Minister for Finance if he intends to conduct any review of the excise duties or VAT rates levied on petrol and diesel, especially in view of the substantial hike in prices over recent months; if he has an estimate of the likely additional amount that will accrue to the Exchequer as a result of recent price increases; and if he will make a statement on the matter. [18583/04]
Amharc ar fhreagraAs the Deputy will be aware, changes in taxation are made in the context of the annual budget and, accordingly, any requests made regarding changes in tax rates are considered in the period leading up to the budget. The Deputy will appreciate that it is neither practical nor prudent to adjust tax rates between budgets, and especially in response to what may prove to be a short-term problem.
The tax content on petrol and diesel is made up of two elements, the excise content and the VAT content. The excise content of a litre of petrol, or diesel, does not fluctuate with price changes.
The standard VAT rate of 21% is applicable to both petrol and diesel. VAT is charged on the total consideration for the goods supplied. Therefore, an increase in price will result in an increase in the Exchequer yield, mainly from petrol. This is because businesses can recover VAT on diesel and any change to the price does not impact on their VAT liability. However, VAT returns are not required to be compiled in a manner which identifies the yield from particular goods and services. It is not possible therefore to estimate with any accuracy any additional VAT which may accrue to the Exchequer.
It should be noted that Ireland's current excise rates remain well below those of many of our main EU trading partners while the rate for diesel is at the EU average for these member states.
