Enda Kenny (Mayo, Fine Gael)
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Question 506: To ask the Minister for Finance the situation regarding the issuing of payment cards for subcontractors to the main contractor; and if he will make a statement on the matter. [40358/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that where a principal contractor engages a subcontractor and that subcontractor holds a C2 or a certificate of authorisation issued by Revenue, the principal contractor can apply to the tax office for a relevant payments card for that subcontractor. The payments card authorises the principal to make payments to that subcontractor without deduction of relevant contract tax and applies to all payments made up to the end of the year that the payments card is valid for. The principal contractor must satisfy himself that the photograph and signature of the C2 holder are in order. Until the payments card for the subcontractor is received from Revenue a principal contractor must deduct RCT from all payments made to a subcontractor.

In processing the application for a payments card, the Revenue Commissioners carry out certain checks to satisfy themselves that the subcontractor is meeting his requirements in relation to his tax obligations before the payments card issues. The payments cards are issued centrally from Revenue's computer systems. Each card is assigned a security number and the date of issue of the card and the principal and subcontractor details are recorded in Revenue's systems. During the year ended 31 December 2004, 41,630 C2s and 245,173 payment cards were issued. Where a contract is still ongoing at the end of a year, and the principal holds a payment card for a subcontractor for the current year, they may apply for a payments card for the coming year, where they have received details of the subcontractors C2 for the coming year.

Where the Revenue Commissioners cancel a C2, all principal contractors that have been issued with a payments card are notified and instructed to deduct RCT from all payments made to the subcontractor after the date of the notice and to return to the Revenue Commissioners any relevant payments cards they hold for the subcontractor.

Richard Bruton (Dublin North Central, Fine Gael)
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Question 507: To ask the Minister for Finance the reason the excise on gas oil for home heating has not been reduced, whereas kerosene and LPG for home heating uses has been reduced; and if he will make a statement on the matter. [40368/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I presume the Deputy is referring to marked gas oil, MGO, more commonly known as green diesel. MGO is a very different product from kerosene, for example, MGO is used in particular, in agricultural tractors, dumpers and mobile cranes. There is also the problem that it can be used illegally, for example, in motor vehicles and trucks. The Revenue Commissioners have a constant fight on their hands to stamp out this activity. Of course, MGO can be used for other non-auto use such as heating but I did not reduce the MGO excise rate for heating because, first, to do so would require putting in place a differentiated rate for MGO depending on its usage which is not possible on a practical level. Second, my initial move in this budget to halve rates, and to introduce a zero rate from next year's budget, for Kerosene and LPG would not be allowable for MGO under the EU energy tax directive. Third, kerosene is regarded as a much cleaner fuel than MGO, with the latter having a much higher sulphur content. Finally, I reduced tax on kerosene to help the excise related price gap between here and Northern Ireland — this issue does not arise in the case of MGO.