Written answers

Tuesday, 20 November 2007

8:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Question 64: To ask the Tánaiste and Minister for Finance if his attention has been drawn to the concerns regarding the removal of the refund of excise duty on fuel used in passenger transport services and that if this rebate is removed, transport providers fear that transport charges will have to increase; if he or his Department have had discussions on the matter with interested groups in the transport industry; and if he will make a statement on the matter. [29560/07]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy may recall that I have answered Parliamentary Questions on this issue over the past year, including on 4 July 2007 and in recent weeks.

The 2003 EU Energy Tax Directive incorporated special derogations which allowed specific excise duty reliefs to be applied in a number of Member States. In the Irish context, these derogations allowed for reduced rates to apply to fuel used for public transport services which includes school transport services.

While these derogations expired on 31 December 2006, Ireland, along with other Member States, sought retention of its derogations beyond that date. However the European Commission, who are the deciding authority, have to date refused all such requests. The Commission maintain that, in keeping with the EU Energy Tax Directive, Member States must apply at least the EU minimum rates of excise on fuels in such circumstances and that any further favourable excise treatment is not allowable. In this regard the Commission's decision was published to its website in March 2007. At the Commission's behest my officials have indicated that Ireland will avail of the forthcoming Finance Bill to make the necessary legislative changes to conform with the Directive.

In the circumstances, the relevant line Departments who have primary responsibility in this regard are, in conjunction with my Department, exploring alternative non-tax support mechanisms that could be put in place where appropriate to maintain the assistance currently being provided, subject of course to compatibility with EU State Aid requirements. In the interim the reduced rates applicable to fuel used will be maintained.

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