Brendan Smith
Ceist:5 Deputy Brendan Smith asked the Minister for Finance if he will give consideration to the concerns of an industry (details supplied); and if he will make a statement on the matter. [39065/11]
Amharc ar fhreagraWednesday, 7 December 2011
Ceisteanna (5, 6, 7, 8)
Freagraí scríofa
I recognise that the price of fuel has increased in recent times. The increase in the price of fuel is an international phenomenon. Fuel prices are driven by a number of factors including the price of oil on international markets, exchange rates, production costs and refining costs. However, given the ongoing pressure on the public finances I am not in a position to reduce the excise rates on motor fuels. While there is scope for a reduced excise rate for certain users of auto-diesel under the EU Energy Tax Directive, any relief here would be extremely expensive especially in the current fiscal environment. Furthermore, a lower commercial rate would require an extensive rebate system which would be administratively difficult, costly to operate and open to abuse.
The price of auto-diesel is currently around 20 cents lower here than the UK. In addition, it should also be noted that businesses are of course entitled to reclaim VAT incurred on their business inputs, including VAT incurred on fuel. For example, VAT incurred on auto-diesel and marked gas oil (MGO or green diesel) used in the course of business is a deductible credit for business in the Irish VAT system. VAT on petrol can not be deducted/reclaimed.
Terence Flanagan
Ceist:6 Deputy Terence Flanagan asked the Minister for Finance his views on a matter regarding budget cuts under the ECB — EU agreement and also the VAT increase; and if he will make a statement on the matter. [39076/11]
Amharc ar fhreagraAs I said when I addressed the Dáil yesterday, the Government carefully considered the various options open to us in terms of taxation. I also said that one of the key objectives of the Government is to get people back to work. Indirect taxes have a less adverse impact on economic activity and employment, which is why Budget 2012 is focusing on indirect taxes such as VAT rather than on income tax. As the details in the Budget have highlighted, our expenditure remains higher than the revenue received. As such, it is essential that we get our public finances under control, and reduce the deficit.
Neither the European Central Bank nor the European Commission have forced us to control our spending; instead this has become necessary as a result of falling tax revenues. As you know, Ireland agreed a programme of financial support in November 2010 with the ECB, European Commission and the IMF. This programme is worth €84 billion, with €17.5 billion coming from our own resources and €67.5 billion being provided from EU funds, the IMF and bilateral lenders. Without this funding the State would not have been able to raise the funds necessary to pay for key public services for our citizens. The programme provides us with a road map to get out of the current crisis. Its objectives are to ensure that the economy can return to sustainable growth, consolidate our fiscal position and support the return to a properly functioning banking system. The provision of this funding is conditional on meeting policy commitments. These commitments are negotiated with our external partners. It is also the case that our EU membership requires us to bring our General Government deficit below 3% of GDP by 2015. The adjustments we are undertaking are those that would be required in the normal course. The EU-IMF funding provides us with the space to do so over a number of years.
Gerry Adams
Ceist:7 Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 126 of 29 November 2011, the reason the VAT deduction on the cost of acquisition of a bus for publicans who operate buses exclusively for taking patrons to and from the public house is limited to buses of more than 16 seats. [39110/11]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the distinction between motor vehicles designed and constructed for the carriage of more than 16 persons, including the driver, and other motor vehicles has been in VAT legislation since its introduction in 1972. At that time such vehicles were liable to VAT at the low rate of VAT (16.37%) whereas other motor vehicles were liable to VAT at the standard rate of VAT (30.26%). Prior to January 2009, VAT legislation prohibited any VAT deduction to the extent that it related to expenditure incurred on the acquisition of a motor vehicle designed and constructed for the carriage of less than 16 persons, including the driver. The Finance (No. 2) Act 2008 allowed a deduction in respect of up to 20% of the VAT incurred on the purchase of certain motor vehicles (including those capable of carrying less than 16 persons), subject to normal deductibility rules. Full details of this arrangement are contained in Revenue' Information Leaflet "Motor Vehicles — Deduction of VAT on Certain Cars", published on www.revenue.ie. However, no deduction is available if passengers are charged for transport as this is a VAT-exempt activity.
Finian McGrath
Ceist:8 Deputy Finian McGrath asked the Minister for Finance his views on a matter (details supplied) regarding low carbon fuels. [39127/11]
Amharc ar fhreagraThe matter raised relates to the application of the carbon tax to solid fuels. As the Deputy is aware carbon tax does not currently apply to solid fuels and such taxation remains subject to a commencement order. The matter raised will be taken into consideration in the event of a decision to proceed with taxation of solid fuels.