Niamh Smyth
Ceist:410. Deputy Niamh Smyth asked the Minister for Finance the reason that a bag of smokeless coal has doubled in price (details supplied); and if he will make a statement on the matter. [43932/22]
Amharc ar fhreagraThursday, 8 September 2022
Ceisteanna (410)
Freagraí scríofa
The price of coal is determined by a number of factors such as global market dynamics, costs of labour, exchange rates, taxation as well as wholesale and retail pricing policy practices which may include additional pricing to cover transport and distribution costs.
Coal supplies in the State are subject to Solid Fuel Carbon Tax (SFCT) and Value-Added Tax (VAT). SFCT is an excise duty and is commonly referred to as carbon tax. SFCT applies at different rates to coal, peat, and peat products when they are first supplied in the State. Smokeless coal, low smoke coal and smoky coal all attract the same rate of SFCT, currently €107.98 per tonne. Current SFCT rates per tonne are summarised in the table below along with SFCT rates in place this time last year.
|
Description of Solid Fuel |
SFCT from I May, 2021 - 30 April, 2022 |
SFCT from 1 May, 2022 |
|
Coal |
€88.23 |
€107.98 |
|
Peat Briquettes |
€61.42 |
€75.17 |
|
Milled Peat |
€30.44 |
€37.25 |
|
Other Peat |
€45.65 |
€55.87 |
In relation to Value-Added Tax (VAT), the VAT rating of goods and services is subject to 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 Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive.
The distribution and sale of coal to a consumer in the State is subject to normal VAT rules and the Irish supplier is liable to account for VAT, at the reduced rate of 13.5%, on the supply. The consideration for a supply of goods is defined in EU VAT law and consists of everything which the supplier is entitled to receive in return for the goods supplied including taxes, duties, levies and charges, excluding the VAT itself. Therefore, VAT is chargeable on top of the SFCT applicable to the supply of coal.
The table below sets out the SFCT and VAT costs, at current SFCT rates, on a 40kg bag of smokeless coal retailing at €40. The table also sets out the SFCT and VAT that would have applied this time last year on the same pre-tax price.
|
40kg bag of coal |
Pre-tax price |
SFCT |
VAT at 13.5% |
Total Taxes |
Retail price |
|
At current SFCT rate (€107.98/tonne) |
€30.92 |
€4.32 |
€4.76 |
€9.08 |
€40.00 |
|
At SFCT rate in place Sept 2021 (€88.23/tonne) |
€30.92 |
€3.53 |
€4.65 |
€8.18 |
€39.10 |
|
Difference |
€0.00 |
€0.79 |
€0.11 |
€0.90 |
€0.90 |
The figures above illustrate that the increase in the SFCT rate since this time last year has resulted in 90 cents of an increase in the total tax cost of a 40 kg bag of coal retailing at €40. The more significant price increases that the Deputy has referred to are not attributable to taxation.
My advice to consumers is to shop around and if possible use price comparison websites to ensure they receive the best value for money.
Question No. 411 answered with Question No. 394.