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

Sinn Féin stated that it does not support any significant changes to personal taxation. That is its policy and that is what it has stated. At a point when prices are going up and inflation is also beginning to rise which, as the Deputy knows because he understands these things well, means that our tax code benefits as a result due to its potential non-indexation, he is against using any of those benefits to help those affected by rising inflation. He is against it. He voted against changes that we made to the standard rate of income tax to help, in particular, people who are on middle incomes and paying the higher rate of income tax. He is against that policy. At a time when the cost of living is going up, he is against any changes to personal taxation to help those on low- and middle-incomes to cope with it. That is the Sinn Féin approach. I completely disagree with the Deputy and I believe he is wrong. I do not believe in, nor have I ever implemented, tax cuts that I was concerned might be unaffordable in the future. I do believe that at a time when inflation and prices are going up, targeted and affordable changes, which I have implemented in this budget and will implement in budgets that are coming up, can make a difference. Sinn Féin is against that.

The issue of VAT on domestic energy bills has been raised by the Deputy. We discussed it on Committee Stage and I will begin my response to it. The particular issue that was raised related to the reduction of the VAT rate below 12% on a temporary basis. If we did that, the issue we would then face, and my officials advised me of this, would be that we would not be able to retain the derogation we currently hold that allows us to apply a reduced rate of VAT in other parts of our tax code. This means that the VAT rate on electricity, gas, oil and fuel would increase to 23% when the temporary relief expired. I do not want to be in that position, which is why I am not looking to implement that policy. I will address the other VAT policy matters if time allows.

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