I am assured by Revenue that combating the threat which illegal cross–border trade and smuggling of all kinds, including that in fuel products, poses to legitimate businesses, consumers and the Exchequer continues to be a priority. Revenue and An Garda Síochána collaborate closely in acting against illegal cross-border trade, and also cooperate with their counterparts in Northern Ireland under the framework of the North-South Joint Agency Task Force.
Steps taken by Revenue to combat the illegal mineral oils trade, including home heating oils, include the introduction of stringent supply chain controls and reporting requirements, a rigorous programme of risk focused enforcement action and the application of robust legislation. In addition, Revenue and the UK Revenue and Customs undertook a joint initiative to introduce a new marker for use in marked fuels, which came into operation in April 2015. The industry view is that the actions taken have been successful in curtailing fuel fraud.
Solid Fuel Carbon Tax (SFCT) is an excise duty that applies to coal and peat when first supplied in the State for use as a fuel. Neither the movement of solid fuel into the State nor the physical presence of solid fuel in the State generate a liability to SFCT. Therefore, there is no smuggling offence, in terms of evasion of SFCT, attaching to coal coming into the State from Northern Ireland. Solid fuel carbon tax is collected by Revenue on a self-assessment basis and compliance with the law is enforced using the full range of compliance interventions and enforcement provisions for self-assessed taxes.
Currently, there is no carbon tax on solid fuel in Northern Ireland. This factor, combined with that jurisdiction's lower VAT rate on solid fuel, lower environmental standards and currency fluctuations, can give rise to significant price differentials which incentivises the sourcing of solid fuel from Northern Ireland. EU Single Market constraints, which still apply in Northern Ireland, preclude the use of any cross-border movement controls in the administration of SFCT. This means that solid fuel coming into the State from Northern Ireland is not subject to cross-border movement controls typical of harmonised excises on mineral oils, tobacco and alcohol. I am advised that Revenue has no authority to stop vehicles and physically inspect loads of solid fuel. Similarly, Revenue has no authority to challenge transportation or possession of solid fuel that originated in Northern Ireland as such transportation or possession are not, in themselves, Revenue offences. Even if controls were possible, a person transporting solid fuel from Northern Ireland could legitimately claim that SFCT will be accounted for on relevant supplies made in the State. An SFCT return does not have to be made until one month after the end of the two-month accounting period in which the supply is made.
Finally, the Deputy refers to enforcement proceedings for years 2018 to 2021 to date which I presume are in relation to the enforcement of environmental standards on solid fuel; and also refers to new regulations which I presume are the regulations restricting the use of smoky fuel. I am advised that Revenue does not have a role in relation to these matters. They come, instead, under the ambit of the Department of the Environment, Climate and Communications and are enforced through the local authorities. The Deputy may wish to refer this aspect of his query to my colleague the Minster for the Environment, Climate and Communications.
