Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Deputies. Windfall taxes on energy companies require careful consideration. A windfall tax could create unintended consequences. For example, it could disincentivise investment in renewable energy generation, as there would be uncertainty on profits returned for generators entering the market. Interventions such as windfall taxes may have the potential to reduce the energy costs for consumers through redistribution of additional tax revenues, but they may also themselves be a driver of costs to consumers in that, if a company's tax rate changes, it will factor that into its return on its investment and it will potentially add to the amount it will want to charge for its product. I must stress it is a two-way situation.

It is a complex area. I have stressed that our corporation tax, which is 12.5%, is clear and simple, and the more variations we have to it, the more complicated it is. We are working with the European Commissioners and other member states to consider a policy proposal, outlined under REPowerEU, designated to aid consumers and businesses to deal with increasing costs of energy. The best long-term approach for Ireland is to insulate consumers from volatility on the international wholesale market by investing in energy efficiency and renewable energy.

Cutting our dependence on fossil fuels and generating power from our own renewable sources will ensure cleaner, cheaper energy into the future. I believe that is the direction in which we need to travel.

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