Joan Burton (Dublin West, Labour)
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143. To ask the Minister for Finance his views on the country-by-country report of the European Commission recommending that the State limit the scope and number of tax expenditures and broaden the tax base; and if he will make a statement on the matter. [25325/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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The European Commission published the draft Country Specific Recommendations (CSRs) on 5 June.

The overall objective of the CSRs is to encourage the Member States to increase their growth potential by continuing to improve their economies and further strengthening their economic resilience. It recommends that Member States should prioritise investment needs and address bottlenecks and reforms over the next twelve to eighteen months with the aim of improving sustainable and inclusive growth.

The purpose of the European Semester, of which the CSRs are part, is to coordinate economic policies across EU Member States to help achieve aggregate macroeconomic stability and growth. It involves monitoring of progress by the Commission and discussion with Member States on their economic position and budgetary plans. It culminates in July with the adoption by ECOFIN of the Country Specific Recommendations, which Member States take into account as part of their budgetary cycle.

As part of this process, three CSRs were issued to Ireland for 2019 and 2020, one of which was that we should seek to:

"Achieve the medium-term budgetary objective in 2020. Use windfall gains to accelerate the reduction of the general government debt ratio. Limit the scope and number of tax expenditures, and broaden the tax base. Continue to address features of the tax system that may facilitate aggressive tax planning, and focus in particular on outbound payments. Address the expected increase in age related expenditure by making the healthcare system more cost-effective and by fully implementing pension reform plans."

In respect of the element of that recommendation selected by the Deputy, I can confirm that I, and my Department, continue to review the range of tax expenditures to ensure they remain fit for purpose and make a positive contribution to the lives of the citizens who avail of/benefit from them and to the economy as a whole. I can also confirm that I and my Department, continue to seek ways to broaden the tax base that do not run contrary to the growth focus of this Government.

Joan Burton (Dublin West, Labour)
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144. To ask the Minister for Finance his views on the country-by-country report of the European Commission recommending the State to cut its fossil fuel subsidies and to send a stronger price signal to investors by committing to a schedule of increases in the carbon tax over the next decade; and if he will make a statement on the matter. [25327/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I welcome the publication of the draft Country Specific Recommendations (CSR) for Ireland which form part of the overall European Semester process.

The Commission has opined that Ireland has further potential to improve the way its tax system can support environmental objectives. Reducing fossil fuel subsidies and committing to a schedule of increases in the carbon tax over the next decade are viewed as possible measures in this regard.

The Joint Oireachtas Committee on Climate Action has also recommended that a trajectory of increases in the rate of Carbon Tax up to €80 by 2030 should be implemented once an evidence based plan is in place to provide supports for climate action measures including the provision of supports for fuel poverty. As recommended by the Joint Committee on Climate Action, my Department has launched a public consultation on the options for use of revenue raised from increases in the Carbon Tax. The feedback received from this consultation will help to inform future Carbon Tax policy options. The consultation is open for submissions until 28th June 2019 and is accessible at the following link:

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An examination of fossil fuel tax subsidies and carbon tax will take place in the Tax Strategy Group papers as part of the annual budgetary process.