Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael) | Oireachtas source

I appreciate the opportunity to speak on the Bill, which has been passed by the Dáil. The Bill is relatively short and provides for some of the cost-of-living measures announced by the Government in late February. The full package of measures will cost €1.2 billion and will put money back into people's pockets, help with bills and ensure that there is no cliff edge for the temporary measures already in place. The Government has acted repeatedly and on a significant scale to address the cost-of-living challenge we have experienced. Over the past year, Ireland has experienced a broad based surge in inflationary pressures, leading to higher prices for households and businesses alike. The key driver of these pressures has obviously been Russia's illegal war in Ukraine. The Government appreciates the difficulties families face and that is why significant measures, both within and outside the annual budgetary cycle, have been implemented in a real effort to protect households and businesses from the impact of these costs. We are in a position to help mitigate some of these price increases because of the prudent management of the public finances to date. It is important that we take the opportunity to give people support when and where they need it.

I will use my time this afternoon to concentrate on the measures contained in the Bill. A number of these measures are in place with financial resolutions giving them temporary effect having been recently approved by the Dáil. This illustrates the urgency with which Government views them. I will go into that in a bit more detail later. The Bill is very short, consisting of just eight sections. Sections 1 and 2 deal with a temporary change in the benefit-in-kind, BIK, regime for vehicles. Senators raised this matter at any early stage this year, recognising that this change, which was signalled some years ago, was to come into effect at a very difficult inflationary period that was not anticipated at the time this measure was brought in with a lead-in period of three years. Of course, the Government remains committed to the environmental rationale behind the current emissions-based vehicle BIK regime that has been in operation since 1 January 2023. However, in the current inflationary context, the Government recognises the practical difficulty experienced by some people facing BIK increases under the new regime. To that end, and recognising these difficulties, these two sections provide for temporary changes to BIK for the current year, which will help to mitigate some of the increases associated with the new emissions-based calculation. They introduce a relief of €10,000 to be applied to the original market value, OMV, of cars in categories A to D to reduce the amount of benefit-in-kind payable. This is not applicable to cars in category E. The upper limit in the highest mileage band is amended by way of a 4,000 km reduction so that the highest mileage band is now entered into at 48,001 km. These temporary measures will be retrospectively applied from 1 January 2023 and will remain in place until 31 December 2023, providing targeted support for people at a very difficult time without diluting our commitment to the overwhelming environmental rationale behind making sure that all of our motor taxes are emissions-based. We have a very strong focus on the environmental rationale for such a system.

Sections 3 and 6 deal with agricultural tax reliefs. Senators will be aware that a number of agricultural tax reliefs were introduced or extended in Finance Act 2022 but that it was only possible to provide for them to the end of June this year at that time because the revised EU agricultural block exemption regulation had not been agreed. The new regulation came into effect on 1 January 2023.

Section 3 provides for: the extension of farm restructuring capital gains tax relief to 31 December 2025; the extension of young trained farmer stock relief to 31 December 2024; the extension of registered farm partnership stock relief to 31 December 2024; the extension and amendment of the publication requirements of the accelerated capital allowance relief for capital expenditure on slurry storage to 31 December 2025; and the amendment of the publication requirements for the accelerated wear and tear allowances for farm safety equipment. The amendment of the publication requirements is necessary under the requirements of the revised agricultural block exemption regulation, ABER, that is, the regulation I referred to earlier.

Section 6 deals with two reliefs provided for in the Stamp Duties Consolidation Act 1999. It provides for the extension of the farm consolidation stamp duty relief and the young trained farmer stamp duty relief to 31 December 2025 and for the amendment of the period during which an individual can qualify for this latter relief, after acquiring land, from four years to three years to comply with Article 18(6) of the revised regulation. The sections also provide for transitional arrangements for the coming into effect of those changes.

Section 4 provides for the phased restoration of the rates of excise on petrol, diesel and marked gas oil that will take place in three stages over the coming months, as announced on 21 February. This will see rates restored on 1 June by 6 cent per litre of petrol, 5 cent per litre of diesel and 1 cent per litre of marked gas oil. On 1 September, these rates will increase by a further 7 cent for petrol, 5 cent for diesel and 1 cent for marked gas oil. Rates will then be fully restored on 31 October with a final increase of 8 cent for petrol, 6 cent for diesel and 3 cent for marked gas oil. The extension and phased reintroduction of these excise reductions is estimated to cost €383 million. These changes have already been introduced by a financial resolution and approved by the Dáil.

I note that oil prices have fallen back in recent weeks. I see, and I imagine Senators and anyone watching can see, that prices at the pumps have reduced considerably and are at their lowest level since September 2021. This will mitigate the effect of these increases.

Section 5 deals with VAT changes, some of which were introduced by a financial resolution on 22 February. The section provides for the extension of the 9% rate of VAT on the supply of electricity and gas until 31 October 2023. It also provides for the extension of the 9% rate of VAT on the supply of certain goods and services in the hospitality and tourism sectors until 31 August 2023 and for the continuation of the application of the 0% rate of VAT to the supply of Covid-19 testing kits. Finally, this section provides for the 0% rate of VAT on the supply and installation of solar panels.

At the request of the Minister for the Environment, Climate and Communications, the Minister for Finance, Deputy Michael McGrath, agreed to the 0% rating of VAT for the supply and installation of solar panels for households and private dwellings. I believe the measure is welcome. If passed on to consumers, the Department of Finance estimates it will reduce the average cost for such supply and installation for consumers from €9,000 to €8,000 and will support households in reducing their electricity bills into the future. I encourage the passing on of this reduced VAT rate to households in every situation. A financial resolution to give this amendment legal effect from 1 May 2023 was passed by the Dáil last week. The measure underlines the Government's commitment to helping households to save money on their energy bills, reduce their carbon footprint and contribute positively to our national climate change targets. The estimated cost of that measure to the Exchequer is €19 million annually.

I have already spoken about section 6 with section 3, as both sections deal with agricultural tax reliefs. I will therefore move on to section 7, which deals with the temporary business energy support scheme, TBESS, which was announced in budget 2023. To date, 35,613 claims have been approved under the scheme with a total value of €77.6 million. Revenue is publishing comprehensive information about the scheme on its website. A motion agreed by the Dáil on 22 February approved a number of draft orders. These extend the TBESS to the end of April. The monthly cash cap was increased from €10,000 to €15,000 for a business with a single premises and from €30,000 to €45,000 for a business with multiple premises. These changes took effect from 1 March 2023. The TBESS is provided for in sections 100 and 101 of the Finance Act 2022. However, Section 7 of this Bill will amend section 100 of the Finance Act 2022 to provide that the Minister for Finance may make a ministerial order extending the scheme to a date not later than 31 July 2023. Section 101 of the Finance Act 2022 will also be amended by this Bill. The scheme will be extended to 31 May 2023. It was due to end on 28 February 2023. However, following the exercise of the power contained in section 100 of the Finance Act 2022, the Minister extended the scheme to 30 April 2023, which was the latest date provided for in the legislation.This further extension to 31 May will help businesses deal with the continuing impact of higher energy costs and the power to extend to 31 July will provide flexibility to further extend the scheme if that is considered appropriate. The energy cost threshold is being reduced. Currently, to be eligible for TBESS, a business must have experienced a 50% increase in the average per unit cost of electricity or natural gas relative to the reference period. This is being reduced to 30%. This change will be applied retrospectively from 1 September, when TBESS commenced. The amount of relief that a business will receive is being increased. A business is currently entitled to a payment equal to 40% of the uplift in its energy costs. From 1 March 2023, this will increase to 50%. Finally, the Bill provides for a new time limit for making claims under the scheme, which will be two months from the end date of the scheme. It had previously been four months from the end of the claim period to which the claim relates, so this gives businesses further time and flexibility in which to make a claim. The intention here is to deliver more money to those businesses that have suffered as a consequence of higher energy prices. Some businesses have suffered more than most. I think in particular of butchers and the threat they had due to having to refrigerate meat during a difficult and warm period and during a warmer winter. It is important we respond with the flexibility businesses need to continue to manage their costs.

As Senators will be aware, the amendments to the TBESS were subject to state aid approval and provision was made for a commencement order to give effect to the amendments when such approval was received. That approval was received and I take this opportunity to encourage businesses to join the more than 28,000 others that have already registered for the scheme. I suggest Senators do likewise with businesses in their areas. Revenue has advised that, with effect from last Monday, 17 April qualifying businesses can submit claims on Revenue’s online service, ROS, for the March and April claim periods, and from this, the week beginning 24 April 2023, it will begin reassessing claims already submitted for the period from 1 September 2022 to 28 February 2023 that did not meet the original 50% energy costs threshold, but now qualify under the 30% threshold. This means it will not be necessary for a business to have to go to the trouble and expense of revising claims already submitted for these periods, as Revenue will do it for them. It will notify applicants once reassessment has taken place. Thus, we are trying to make it as easy and practical as possible for businesses around the country that have submitted claims to get more money to support them without having to go to the trouble of having to make a new claim.

The final section of the Bill is the standard one dealing with the Short Title.

As I said, this is a short but important Finance Bill. I look forward to constructive discussion in the House and to hearing the views of Senators. The Bill provides for a number of targeted tax changes and specific measures to support families and businesses and I commend it to the House.