Seanad debates

Thursday, 22 March 2012

Finance Bill 2012 (Certified Money Bill): Committee and Remaining Stages

 

1:00 am

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)

Perhaps that is why the commitment to increase the tax on a tonne of carbon emitted was included in the memorandum of understanding with the EU authorities. As a matter of fact, the commitment was for an increase of €10 per tonne. Since there was a VAT increase, I reduced this to €5 per tonne in the budget.

Irrespective of our jokes on the misfortune of the Green Party, which is no longer with us, we have international agreements on reducing the amount of carbon emitted into the atmosphere. We are subject to penalties if we do not achieve this. We must pay fines if we do not achieve targets. Therefore, there is no easy way out. The tax is not a random tax but a tax to reduce the usage of fuels with large amounts of carbon and to effect a change in practice.

Reference was made to fuel laundering. In this regard, the Senator is absolutely correct. There is considerable criminality at present. Not only does this take revenue from the Exchequer and, consequently, contribute to the reduction in services, it also increases the mood of criminality in the country and establishes a culture of criminality. Every measure should be taken to stop it. It is the difference in the excise rates applying to marked and normal diesel that offers the incentive for laundering. This illicit activity poses a serious threat to the Exchequer and economy.

The Office of the Revenue Commissioners is very diligent regarding this matter. It analyses the nature and extent of the problem on an ongoing basis. Its initiatives in this area include: the development and sharing of intelligence with agencies on both sides of the Border; conducting intelligence-driven operations using covert surveillance to identify oil laundry locations; the seizure of illicit product, laundering equipment and vehicles; physical sampling at road checkpoints; the closure of unlicensed or improperly licensed outlets; and the seizure of stock and prosecution of those involved in illegal activities in regard to mineral oils.

Senator Brennan should note there is a provision in the Finance Bill which in some small way combats fuel laundering. There is a measure that proposes to enhance the supervision and control of the mineral oil supply chain by requiring that, in future, any person dealing in marked mineral oils will have to be licensed by the Revenue Commissioners to do so. There has been a gap in traceability. Those supplying home heating oil, for example, did not have to have a licence from the Revenue Commissioners to trade. By requiring this, it is hoped it will be possible, from the point of import or the point of exit from the oil refinery, to have an unbroken paper trail to the point of sale. We hope that works. It is envisaged that this important change will be complemented by amendments to the mineral oil tax regulations that will lay down new requirements for the recording and reporting of transactions by mineral oil traders. Licensing by the Revenue Commissioners and new regulations on the paperwork to support purchase and sale will help.

I met representatives of the Irish Road Haulage Association. We set up a working party to examine the issue and to determine whether there is a better way of dealing with marked rebated diesel. This includes officials from my Department, staff from the Revenue Commissioners and representatives of the Irish Road Haulage Association. They have met three times already and their work is ongoing. It is very difficult to come up with an alternative that does not lead to widespread evasion. That is the problem.

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