Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank all the Deputies who contributed to the debate. There is an overall context to the Bill, namely, the announcement by the Government to bring forward a package of measures totalling more than €1.2 billion. Had we not brought forward the Bill, a range of tax reductions would have expired overnight at the end of February. The principal reason for bringing forward the Bill is to extend a number of those measures and provide for a phased restoration of some of the rates. Of course, these measures sit alongside a range of other expenditure measures the Government brought forward in the budget and when we announced this overall package in February. Colleagues are well aware of the content of all those measures, including the social welfare measures that were announced which will take effect in the coming weeks.

All of that comes alongside measures announced in the budget last year, some of which have come into effect, with other such measures being introduced during the year. We have already introduced the reduction in childcare costs. That has been warmly welcomed by many families and parents and has resulted in an a reduction of 25% on average. We introduced the income tax changes from 1 January. This month, we are paying the fourth electricity credit against every domestic electricity account in the country and introducing a number of measures to reduce the cost of healthcare, for example, with the elimination of some hospital charges. In education, many colleagues have welcomed the extension of free hot school meals to all DEIS schools and the permanent changes to the school transport fares, as well as the reduction in public transport fares. There is also the increase in the back to school clothing and footwear allowance. I make those points to highlight the context that the Bill sits alongside a range of other measures. This is not the totality of the Government's response to the cost-of-living problems and challenges that many people are facing.

In essence, the Bill provides for the extension of the lower VAT rate on domestic gas and electricity bills to the end of October and the extension of the lower rate of VAT in tourism and hospitality to the end of August. It provides for a phased restoration of excise duty on petrol, diesel and marked gas oil and it introduces a number of changes to the TBESS. I acknowledge the remarks of colleagues in respect of that scheme. I will touch on a number of those measures before I address other points. As regards the issues raised by Deputies Mairéad Farrell, Ó Murchú and Doherty, TBESS only applies to the metered supply of natural gas and electricity. The scheme is designed around determining increases in unit prices and the actual consumption for the period of the scheme based on information made available through electricity and gas maters. It is not possible to calculate oil and liquefied petroleum gas, LPG, usage in the same manner as for electricity and metered gas mains.

That is why my colleague, the Minister, Deputy Coveney, is now following up on that issue. The Government has made a decision to introduce a grant scheme for businesses that are using oil and LPG, the details of which will be provided as soon as possible.

With regard to Deputy Nash’s comment on the complexity of the TBESS, it is designed to be as inclusive as possible and covers businesses of all sizes and sectors that meet the qualifying criteria. The system that is being built to administer the scheme has to accommodate the huge diversity of businesses and their energy arrangements, for example, billed customers, pay-as-you-go customers, new customers, a variety of billing cycles and billing rates and so on. Therefore, to ensure equity in the system, insofar as is possible, like must be compared with like. Comparing claim periods and reference periods that are calendar months means that bills and amounts may need to be apportioned. This apportionment had to be legislated for and necessitated a number of formulas to work out various calculations. The important thing for businesses to note is that Revenue's portal will carry out those calculations and the business is simply required to input the data from the bill or statement and retain that record. Revenue has published detailed operational guidelines on the TBESS, which are available on the Revenue website. These guidelines include screenshots to ensure they are as complete and user-friendly as possible.

Deputies Nash and Shortall suggested that a joint labour committee, JLC, be established. JLCs are set up by the Labour Court following an application from either the Minister for Enterprise, Trade and Employment or a trade union or organisation that represents workers or employers involved in the sector. In the first instance, the establishment of a JLC is a matter for my colleague, the Minister for Enterprise, Trade and Employment. I would also note that establishing a JLC is not a solution in and of itself. The effectiveness of such a committee would be determined by how the various parties engage with it. There can be no guarantee that it would be a success. In summary, I do not feel that making financial support contingent on the establishment of a JLC would necessarily achieve the aim of the Deputies, that is, to improve work conditions and pay across these sectors.

I will address the point made by Deputy Harkin on the TBESS. She raised a very valid question about the change we are making to the timeline for applications. To clarify, the effect of the change is that businesses will have two months after the end of the scheme to claim all the way back. The four-month rule has been removed and the situation is being approved for businesses. They will have two months following the ending of the scheme. The date of that has yet to be finally determined but they will have two months and they can claim all the way back to 1 September 2022.

With regard to Deputy Shortall's comment on the 9% VAT rate on hospitality and accommodation, it is possible to change the VAT rate for hospitality or accommodation without reference to the other. The respective costs of extending the 9% VAT rate to the end of August this year would be €212 million for hospitality, €61 million for accommodation and €27 million for the remaining sectors. If accommodation reverted to 13.5% while hospitality was kept at 9%, however, this change would have to apply to all accommodation, including bed and breakfast accommodation and small hotels, because of the principle of fiscal neutrality, which requires universal application to a sector. As I said previously in response to queries across the House, I am advised by Revenue that there would be significant practical operational concerns in having different VAT rates applying to hotel accommodation and meals given how the sector operates with various packages ranging from bed and breakfast accommodation through to all-inclusive board and lodging packages. I am advised that this could lead to the underpaying of VAT because the charge for accommodation and meals would have to be apportioned. The views of Revenue would undoubtedly provide opportunities for tax planning, which would be difficult to police and would give rise to administrative and operational complexity as well as increased risk of avoidance and scope for manipulation of the VAT system. We made the decision to extend the 9% rate for this sector to the end of August to give the sector and all the businesses in every region in Ireland certainty that it will continue until that time. As I have said on the floor of this House on a number of occasions, it will revert then to the normal rate of 13.5% from the end of August. It is important that I provide clarity and give certainty to the sector on that issue.

There have been a number of comments regarding windfall gains in the energy sector. EU Regulation No. 1854 of last year on an emergency intervention to address high energy prices came into force in October. It seeks to address the issue of windfall gains by collecting and redistributing proceeds from these gains by means of a temporary solidarity contribution based on taxable profits in the fossil fuel production and refining sectors, which will apply for 2022 and 2023. A cap on the market revenues of some generators such as wind, solar and oil in the electricity sector will apply for the period from December 2022 to June 2023. Proceeds from the cap on market revenues are expected to be collected in September 2023 and will be used to support electricity customers in mitigating the impact of higher electricity prices as set out in the European Council regulation. The proceeds from the temporary solidarity contribution are expected to be collected in September this year and September next year. The European Council regulation allows for these proceeds to be used in a wider range of areas including to financially support energy consumers to reduce energy consumption or to promote investments in renewable energy.

I would point to the press release that was issued by my colleague, the Minister, Deputy Eamon Ryan, following the Cabinet's decision today to approve the general scheme of the energy (windfall gains in the energy sector) Bill 2023. The general scheme will be the basis of primary legislation, which will be brought to the Government before being published and introduced in the Oireachtas. It is intended, to answer the question put by a number of colleagues, that this legislation would be enacted before the summer recess. I do not have time, unfortunately, to go through all the other issues that were raised.

I again thank colleagues for their broad support for the Bill. Others would like to do far more in the Bill, and I acknowledge those points. I thank the members of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach for facilitating the swift passage of this Bill. It is important that we are in a position to give permanent legislative effect to the extension of these tax measures into the future. I understand we have a date for Committee Stage of this Bill next week. I look forward to going into more detail on a whole range of measures set out in the Bill at that point.

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