Richard O'Donoghue (Limerick County, Independent) | Oireachtas source

The Government has been forced to bring in amendments in respect of the treatment of BIK, whereby a person driving 50,000 km in a company car with an emissions rating of 120 g per kilometre will now pay BIK at 12% rather than 15%, and the value of the vehicle will be reduced by €10,000. When people were buying electric cars, the Government said they would be exempt from BIK. Now we have companies that invest in electric vehicles and the people driving them are handing them back because of the current rates and asking the company to pay them mileage because of the tax regime for this. They are buying diesel or petrol cars, running their own cars and getting paid mileage because of the system that has been put in place and because the Government did something but did not do enough.

The Bill extends the current rate of VAT per litre reductions of 21 cent on petrol, 16 cent on diesel and 5.4 cent on MGO until 23 October. Those reductions should never be reversed because the Government has made billions of euro off road users. It has targeted people in small businesses and put them out of business because of the situation with rural transport. In doing so the Government will drive up inflation again because this country, since there are no alternatives, is run on fossil fuels. Whether it is the farming sector or the transport sector, getting food to the shelves depends on transport. The Government has taken in enough taxes - 50 cent on petrol and 44 cent on diesel - and now, because it took a small piece of it off, it wants to put it back on again. It is taxing businesses out of business.

I welcome in the Bill the VAT rate on electricity at 9%, but the Government's coffers are not down because, with the inflated cost of electricity and the reduced VAT rate of 9%, its funds are still up on when the rate was 13.5% two years ago. It will actually have more in the coffers now at 9% than when the rate was 13%. Instead, what the Government needed to do was tackle the providers. Even though electricity cost only 50 cent per kWh, the Government put a cap of €120 per Mwh on market revenues. The providers are still making 120% or 130% on the cost of producing electricity, again putting businesses out of business.

Finally, I welcome the extension of the reduced VAT rate on hospitality. It should stay at that rate because if the Government increases it, people will not be able to afford dinners. It will increase the cost of a dinner for a normal person by €1.50.

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