Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I move amendment No. 121:

In page 57, to delete lines 2 to 6 and substitute the following: “34.Chapter 4 of Part 2 of the Finance Act 2001 is amended—

(a) in section 136 by inserting the following after paragraph (c) of subsection (6):

“(ca) to take account of and, without payment, take samples of any product referred to in section 97 and of any materials, ingredients and substances used or to be used in the manufacture of such product,”,

and

(b) by inserting the following after section 137:

“Substitute fuels

137A.(1)In this section—

‘business’ means any employment, trade, profession or vocation;

‘relevant person’ means any person who has procured or has or had possession, custody or control of a relevant product;

‘relevant product’ means any product in liquid form.

(2) A word or expression used in this section and which is also used in Chapter 1 of Part 2 of Finance Act 1999 has, unless a meaning is assigned to it in this section or the contrary intention otherwise appears, the same meaning in this section as it has in that Chapter.

(3) An officer may make such enquiries of any person as the officer deems appropriate to establish the use or intended use of a relevant product and such person shall give to such officer all information required of such person which is in his or her possession, custody or procurement.

(4)(a) Subject to paragraph (b), where an officer forms an opinion that a relevant product is a substitute fuel or an additive, the powers set out in sections 134 to 136 and section 140 shall apply in respect of that relevant product.

(b) An officer may form an opinion that a relevant product is a substitute fuel having regard to the following:

(i) the relevant person’s business;

(ii) the relevant person’s stated reasons for procuring or having possession, custody or control of the relevant product;

(iii) the nature of the relevant product, including the nature of any package or container;

(iv) the relevant person’s conduct, including his or her use, or stated intended use, of the relevant product or any refusal to disclose his or her use, or intended use, of the relevant product;

(v) the quantity purchased of the relevant product;

(vi) the frequency of deliveries of relevant products to the relevant person;

(vii) any document or other information whatsoever about the relevant product;

(viii) any other circumstances that appear to be relevant.

(5) Where the officer forms the opinion that the relevant product is a substitute fuel the purchaser shall be liable to mineral oil tax unless the relevant person demonstrates to the satisfaction of the officer that the relevant product was used or is intended for use for purposes other than motor or heating fuel or as an additive.”.”.

This amendment to the Finance Act 2001 is to enhance the powers available to Revenue to deal with an emerging mineral oil tax fraud involving substitute fuels. It provides that a Revenue officer, having made enquiries to establish the use or intended use of a product, may form an opinion that it is a substitute fuel. Revenue officers may form such an opinion only after taking into account certain specific circumstances as they apply in each particular case in relation to the product and the person who has possession, control or custody of it.

Substantial progress has been made in recent years in eliminating the type of fuel fraud known as fuel laundering. This progress has been recognised in a recent report by the Comptroller and Auditor General. However, fuel fraud practices continue to evolve and continued vigilance in this area is vital. I am advised by Revenue that certain types of mineral oil are being imported into the State for use as substitute fuels for motor vehicles but are being described as lubricants. Such fraud is spreading across the EU and in some instances Revenue officers have detained and seized quantities of such mineral oils.

Existing mineral oil tax legislation applies a charge to substitute fuels. However, issues arise in practice in proving that such products are suitable or intended for use as motor or heating fuel. The proposed amendment will provide for Revenue powers to address such fraud and will not impact on the legitimate trade. We are aware from past experience that fuel fraud presents a serious threat to the Exchequer and to legitimate trade. To ensure the progress made in recent years in addressing such fraud is not undermined, it is essential to address this fraud risk in a preventative way and at the earliest opportunity.

I should inform the committee that there may be a requirement to make a minor amendment to this legislation. If this proves to be the case, the Minister intends to bring this amendment forward on Report Stage.