Charlie McConalogue (Donegal, Fianna Fail) | Oireachtas source

I thank the Deputy for posing this question. In the context of the Ukrainian crisis, significant implications are being seen across all sectors, including the agrifood sector. As well as the immediate humanitarian crisis that is facing us and that must take priority, we need to take the necessary steps to ensure food security is maintained in the period ahead.

The impact the illegal war in Ukraine is having on our farm families is the number one priority for me and the Department. At farm level, the crisis has been impacting significantly on the price of fertiliser, animal feed and fuel. Within the Department, I have established a rapid response team to monitor actively the impacts on the agrifood supply chain and to contribute to the whole-of-government response. I have established the national fodder and food security committee, headed by Teagasc under Professor Frank O'Mara and chaired by Mr. Mike Magan, and tasked it to prepare an industry response and develop contingency plans and advice to assist farmers in managing their farm enterprises over the coming months. I have also announced a number of measures over the past three months to assist the agricultural sector and am currently considering, and will continue to monitor, what additional measures may be necessary.

One of the main input costs for contractors is fuel, which has been subject to significant price rises in recent months. While primary responsibility for the taxation of fuel lies with the Minister for Finance, I continue to work closely with him to ensure the tax code reflects the Government's priorities for the agrifood sector. I am working closely with the Minister of State, Deputy Heydon, in advocating for that.

Ireland's taxation of fuel is governed by EU law, as set out in the energy tax directive, and the Finance Act 1999 provides for the application of excise duty in the form of mineral oil tax. As the Deputy will be aware, gas oil that qualifies for a reduced rate of mineral oil tax is marked green and is usually referred to as marked gas oil, MGO, known as green diesel or agricultural diesel.

Additional information not give on the floor of the House

Mineral oil tax is comprised of a non-carbon component and a carbon component. The carbon component is commonly referred to as carbon tax and the non-carbon component is often referred to as excise. In March, the Minister for Finance reduced the excise rate on agricultural diesel by 2 cent per litre and then again by an additional 3 cent from 1 May. This total reduction of 5 cent reduces the non-carbon component, or excise, to nil. The current rate of mineral oil tax on agricultural diesel is €111.14 per 1,000 litres. This compares favourably with the current rate applied to auto diesel, which is €405.38 per 1,000 litres.

It should be noted that those who incur expenses in respect of farm diesel in the course of farming or the trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.

I continue to engage with all stakeholders and continue to work across Government and with our European partners to respond to this crisis, using all of the tools at our disposal. I am taking a proactive approach to the crisis in Ukraine. We must protect our agrifood sector through this period of significant upheaval.

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