Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The rebate was introduced specifically for persons with road haulage licences. The motivation related to those who transported goods abroad. If our model for recovery is export-led growth, one can justify in policy terms a rebate for the people who carry our exported goods into other countries.

Rebates were available in Belgium and France. Instead of buying diesel in Ireland, hauliers were filling up abroad for their return journeys. In revenue terms, what I have done is justified by the prospect of a transfer of purchasing activity back to Ireland from the rebated diesel abroad. I extended this provision subsequently to people involved in bus travel, the motive being to provide a further small incentive to the tourism industry. The people in the coach hire business do not buy diesel abroad. All of their stuff is domestic. No clawback is available in that respect.

The provision is focused and restricted. We do not want a rebate for everyone who carries goods, cattle or anything else. In introducing the rebate on excess duty and auto diesel, I was seeking to reduce costs in respect of export-led growth for small businesses and to assist the tourism industry in the year of The Gathering. I am conscious of the costs involved for the Exchequer and of the risk that such a scheme is open to abuse. Accordingly, one means of facilitating compliance is to restrict access to the scheme to tax compliant and licensed operators.

In providing the tax relief, I do not believe that own account operators are, for the most part, in competition with hire and reward operators, since most are by their nature providing transport services for their own products. In this regard, while I appreciate that companies have reduced overheads as much as possible, own account operators have a greater facility to incorporate transport costs within the overall cost of the product. I am also aware that some own account operators have Department of Transport, Tourism and Sport licences in respect of that part of their fleets that provides an element of hire and reward services, but my main concern in this area is to ensure the risk of fraud around the rebate scheme is minimised. The requirement to hold an operator's licence from the Department of Transport, Tourism and Sport or an equivalent licence recognised under EU law is a significant element of the compliance regime.

The haulage industry's argument was that the amendment would be cost neutral. I do not accept that - there would be a cost to the Exchequer.

With regard to the transfer of purchasing back home from abroad, I do not accept the argument that the Revenue would gain. There is a cost, which could be significant, if the application of the rebate were to widen. I want it focused. We are focusing it by saying that it has to be tax compliant hauliers who have a haulage licence. Something similar applies to private bus operators.