Tax Code.

Dáil Éireann Debate, Wednesday - 10 March 2010

Wednesday, 10 March 2010

Ceisteanna (72)

P. J. Sheehan

Ceist:

102 Deputy P. J. Sheehan asked the Minister for Finance if he will address the concerns of a manufacturing company (details supplied) regarding the increased costs arising from the carbon tax being added to its liabilities covered by the emissions trading scheme; the reason those who use natural tax are not being exempted when those who use fuel oils are being exempted; if this is in conflict with his policy as required by the Environmental Protection Agency in its preconditions for the granting of an IPC licence; and if he will make a statement on the matter. [11443/10]

Freagraí scríofa

Minister for Finance (Deputy Brian Lenihan)

The Finance Bill 2010 provides more detail on how the carbon tax will operate in relation to installations that are covered by the EU Emissions Trading System (ETS). A full exemption applies to EU ETS installations in the powergen sector, but ETS installations in other sectors will be required to comply with EU minimum excise rates. In practice, no additional charge arises in the case of mineral oils, as the existing mineral oil tax rates all satisfy the EU minimum rates and those companies within the ETS continue to pay those minimum rates. However, implications do arise, for example, in the case of gas as it has not been taxed up to this point. The carbon tax therefore brings gas into the tax net for the first time; consequently, the EU minimum rate is being applied. The EU minimum rate in the case of gas is about one sixth of the carbon tax rate i.e. 54 cents per megawatt hour. I do not consider that the application of EU minimum excise rates is in conflict with preconditions for licences granted by the EPA.