Gerald Nash (Louth, Labour) | Oireachtas source

I might beg the indulgence of the Minister and Chairman for a few moments because my question does not relate directly to excise duty but to additional factors that inform the cost to the consumer of fuel and energy. Many of us, at least those of us on the Opposition benches, have been arguing for some months that the Government should seek a derogation from the VAT directive to allow the State to reduce VAT rates on fuel and energy for a period of time. This derogation could ensure that the VAT rate would not go up to 23% on the conclusion of that mitigating measure. We know the Central Bank has estimated that inflation may peak at 8% this year. This could be a conservative estimate. The Exchequer returns today are very impressive given the current context. Income and corporation tax and VAT receipts are up considerably on comparable months, namely, the first quarter of 2019 pre-pandemic. VAT receipts are up by 17%, which is significant in anyone's language. It is fair to say that a significant composition of the increase in VAT receipts comprises VAT charged on the increased costs of fuel and energy for householders and businesses. There is a strong case and policy rationale for some of that VAT windfall to returned to the pockets of those who need it most. Many of us on the Opposition benches have been arguing for the Government to seek a derogation from the VAT directive at European Commission level and it seems as if some headway has been made in that regard in recent weeks. Could the Minister update the committee on what headroom is available to him in respect of the potential reduction in VAT? My interpretation of the Taoiseach's remarks in recent days about mitigation measures leads me to believe that the Government may be considering a reduction in VAT on fuel and energy on a temporary basis. Will the Minister confirm that this is under consideration by him and his Government colleagues and let us know when he expects to make a decision on the mitigation measures the Taoiseach remarked upon in recent days?