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

I thank the Senator for raising this matter in the House today. First, I wish to apologise to Senator Boylan and to the House for the non-availability of the Minister for Finance, Deputy Donohoe, or myself yesterday, or of a Minister of State to speak on our behalf. I appreciate the forbearance of Senator Boylan in agreeing to speak on the Commencement matter today. I thank her for that.

At the outset it should be noted that neither the Minister for Finance, Deputy Donohoe, nor the Minister for Transport, Deputy Eamon Ryan, have given consideration of a levy on private jet departures to date. However, it is noted that Switzerland is well-advanced with such a proposal, although it is understood that it has not been commenced yet and neither has the levy rate been determined. The Swiss proposal would apply to private non-commercial flights departing from an airport situated in Switzerland and provides for a list of exemptions, including emergency medical service flights, military flights, flights operated under a public service obligation, etc. It is understood that France is giving consideration to the introduction of such a levy as well as in an effort to make transport greener and fairer.

In this regard, it should be noted that the issue may be raised by the French minister for transport at the upcoming informal Transport Council that will take place in Prague in the coming days, 20 to 21 October.

Before consideration could be given to any proposal of this type, we would need to gather information about the accurate number of private jets departing from Irish airports and I note the figures Senator Boylan mentioned. We need this on a yearly basis to establish the feasibility of such a measure. Private flights is a broad term without a specific definition, which can capture many different types of flights such as privately owned jet aircraft, to which the Senator refers, business aviation, fractional ownership by multiple owners, to name a few. At present the Department of Transport does not hold complete data on the number of private flights that pass through our airports as non-commercial operations are not required to apply for a flight authorisation prior to landing in an Irish airport.

I would like to touch on the taxation of fuel used for aviation, which is the responsibility of the Minister for Finance, Deputy Donohoe. Ireland's excise duty treatment of fuel used for air navigation is governed by European Union law as set out in directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the energy tax directive, ETD. The ETD was transposed into national law in the Finance Act 1999. Under the ETD member states are obliged to exempt from excise duty certain mineralised fuels used for commercial aviation purposes. In aviation fuels, the scope of the ETD exemption covers jet fuel, described as heavy oil, which is the most commonly used fuel type in air navigation. The exemption must encompass all jet fuel used for intra-community and international air transport purposes. A member state may, however, waive this exemption for intra-community flights but only where it has entered into a bilateral agreement with another member state to tax the fuel. Ireland has no such agreement at present and, therefore, the exemption from taxation is applied to all jet fuel used for commercial intra-community flights. The ETD provides that member states may opt to fully or partially exempt from taxation jet fuel used for commercial, domestic or air navigation. Currently, Ireland's mineral oil tax law provides that a fuel relief to apply to jet fuel used for all commercial air navigation, including domestic intra-community and international.

With regard to aviation fuel for commercial international transport, the scope for a member state to take a unilateral approach on taxation on aviation fuel is limited not only by the ETD but by international law and a range of bilateral and multilateral agreements that operate under the 1944 Convention on International Civil Aviation, also known as the Chicago Convention.