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Tax Data

Dáil Éireann Debate, Tuesday - 26 July 2022

Tuesday, 26 July 2022

Ceisteanna (373, 374)

Pádraig MacLochlainn

Ceist:

373. Deputy Pádraig Mac Lochlainn asked the Minister for Finance the amount of litres of marine diesel used by the agriculture sector for each of the past ten years in tabular form; and if he will make a statement on the matter. [40654/22]

Amharc ar fhreagra

Pádraig MacLochlainn

Ceist:

374. Deputy Pádraig Mac Lochlainn asked the Minister for Finance the estimated cost to the Exchequer of reducing the cost of marine diesel by €0.20 and €0.35 per litre; and if he will make a statement on the matter. [40655/22]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 373 and 374 together.

Two taxes apply to fuel supplies: excise duty, in the form of Mineral Oil Tax (MOT), and Value-Added Tax (VAT).

Ireland’s excise regime for fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. Finance Act 1999 provides for the application of excise duty, in the form of Mineral Oil Tax (MOT), to specified mineral oils, such as petrol, diesel, and kerosene, that are used as motor or heating fuels. The standard rate of MOT, currently €405.38 per 1,000 litres, applies to diesel used in road vehicles. Other uses of diesel, such as in agricultural tractors, qualify for a reduced MOT rate of €111.14 per 1,000 litres. Certain uses of diesel, including commercial sea navigation/fishing, are fully exempted from MOT. By contrast, the standard rate of MOT applies to diesel used for other marine purposes, such as for non-commercial navigation or for non-commercial sea fishing.

I gather that the Deputy is asking about diesel used for commercial sea navigation/fishing, which is exempt from MOT. I am advised by Revenue that the total amount of such diesel use over the last 10 years is as set out in the following table:

Diesel used for Commercial Sea Navigation/Fishing (exempt from MOT)

Year

Volume '000s Litres

2021

159,711

2020

146,930

2019

129,118

2018

127,133

2017

112,876

2016

120,313

2015

105,783

2014

110,217

2013

94,892

2012

93,467

I understand that the Deputy is also asking about the Exchequer cost of potentially reducing the price of diesel used for marine purposes. As explained, there is already a full exemption from MOT in respect of diesel used for commercial sea navigation/fishing, so there is no scope to reduce the excise further, and consequently no Exchequer cost would arise. The question of reducing the market price for users of such diesel is a commercial matter between the users and their suppliers.

In relation to VAT, the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate from VAT. Within its rates structure, the EU VAT Directive also allows for historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III. Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%. Ireland also holds a number of derogations, under which it is permitted to retain some historic VAT arrangements, under strict conditions.

One of these arrangements that Ireland retains is the application of one of the reduced rates of VAT, currently 13.5%, to the supply of certain fuels including marine and tractor diesel. However under the Directive this rate cannot be reduced below 12%, and furthermore it would not be permitted to reduce the rate to 12% for one item alone (for example, diesel used for marine purposes) without also changing the rate for all the other goods and services that are currently charged at the 13.5% rate.

Notwithstanding this, there is another relief that will be of interest to the Deputy. Under the Value-Added Tax (Refund of Tax) (no. 16) Order,1983, VAT unregistered fishers can claim a repayment of VAT paid on the purchase or importation of marine diesel for use on a registered sea-fishing vessel. Under the standard rules in the VAT regime, VAT-registered fishers can recover VAT on their inputs, including their use of diesel for fishing. Therefore, fishers are already entitled to recover VAT on their diesel for fishing vessels, so there is no scope for further relief.

Question No. 374 answered with Question No. 373.
Question No. 375 answered with Question No. 328.
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