Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Okay. Amendment No. 134, as the Deputy has said, focuses on the agricultural sector and amendment No. 133 is much broader than that. He has spoken on amendment No. 134 so I will confine my comments to that for now. The main exposure that the agricultural sector faces to carbon tax is through the use of marked gas oil, MGO, also known as agricultural diesel or green diesel. It is already subject to an exceptionally low rate of mineral oil tax, much lower than that applied to auto diesel. The rate of mineral oil tax on MGO is currently 11.8 cent per litre and it will increase to 13.8 cent per litre in May 2021, following the application of the increase in carbon tax. This compares very favourably with the current rate of mineral oil tax applied to auto diesel, which is 51.5 cent per litre.

In budget 2012, my predecessor made provision for a double income tax relief for farmers to compensate for the increase in carbon tax at the time. Section 664A of the Taxes Consolidation Act 1997 provides that a farmer may take an income tax or corporation tax deduction for farm diesel, including any carbon tax charged in respect of the diesel, and then a further deduction for farm diesel which is equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at the rate of €41.30 per 1,000 litres of farm diesel, which is the 2012 baseline.

This relief continues to apply. While I am mindful of the point made by Deputy Naughten that any change in carbon taxation does have an effect on those who are paying it, and I accept that, on the other hand a set of very comprehensive reliefs and supports is in place for the agricultural sector that I believe gives very strong recognition of the challenges it faces as we adjust to a lower carbon future. For these reasons, I cannot accept the Deputy's amendment.