Dáil Éireann Debate, Wednesday - 18 October 2006
122 Mr. Durkan asked the Minister for Finance if he intends to reduce, amend or abolish stamp duty for first time or other categories of house buyer in line with the views expressed by his colleague to the effect that the revenue accruing from stamp duty was no longer required; and if he will make a statement on the matter. [33204/06]
Amharc ar fhreagraAs the Deputy will appreciate, it is not the practice to comment in the lead up to the annual Budget and Finance Bill on the intention or otherwise to make changes in taxation.
123 Mr. Pattison asked the Minister for Finance his views on the effectiveness of tax incentives for environmentally friendly vehicles and biofuels; the plans he has to request that tax incentives for environmentally friendly vehicles and biofuels are included in Budget 2007 in order to help meet our Kyoto commitments; and ifhe will make a statement on the matter. [33101/06]
Amharc ar fhreagraIn recognition of the need to tackle the issue of climate change and reduce our dependency on fossil fuels, this Government has introduced a number of tax reliefs aimed at promoting environmentally friendly vehicles, in addition to the promotion of alternative motor fuels.
Firstly, a VRT relief for hybrid electric vehicles was introduced in January 2001. The purpose of the scheme — which provides for a 50% reduction in the VRT charge — is to encourage the purchase of vehicles that use a combination of an internal combustion engine and an electric motor to derive motive power. This hybrid electric technology results in significantly lower pollutant emissions than conventional vehicles powered exclusively by internal combustion engines. Some 1,400 of such vehicles have been purchased to date.
In Budget 2006, I extended this 50% VRT relief to include flexible fuel vehicles. These are defined as cars or small vans produced so as to be capable of using a blend of ethanol and petrol containing a minimum of 85% ethanol. Inclusion of this category in the 50% VRT relief should encourage the purchase of vehicles that have been manufactured with flexible fuel capabilities which will result in lower pollutant emissions than conventional vehicles fuelled exclusively by petrol/diesel. Relief has been granted to some 55 vehicles to date.
While the promotion of biofuels and other renewable energy is primarily a matter for my colleague, the Minister for Communications, Marine and Natural Resources, I am pleased to inform the Deputy that in Finance Act 2006 I provided for significant tax measures to promote biofuels in Ireland. The scheme of excise relief for biofuels will:
provide for excise relief on up to 163 million litres of biofuels per annum;
cost over €200m over 5 years;
when fully operational, result in CO2 savings of over 250,000 tonnes per annum;
meet a target of 2% transport fuel market penetration by biofuels by 2008;
help reduce our dependency on conventional fossil fuels, and
stimulate activity in the agricultural sector.
Regarding the effectiveness of these measures, I note that from the level of interest expressed to the Department of Communications, Marine and Natural Resources in relation to the new Biofuels scheme, it is clear that in time this level of excise relief will foster strong growth in the domestic biofuels industry. With 1,400 hybrid cars availing of the relief, the effect of that measure is clear. On the relief for flexible fuel vehicles, there is a limited supply of such models which explains the low numbers to date.
