Ruairi Quinn (Dublin South East, Labour)
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Question 88: To ask the Tánaiste and Minister for Finance if he will estimate the Exchequer income for the years 2008, 2009 and 2010 from the electricity tax proposed in the Finance Bill 2008; if this tax is expected to impact on consumption patterns; and if he will make a statement on the matter. [7730/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Finance Bill provides for the introduction of an excise duty on electricity, called electricity tax, as required under the EU Energy Tax Directive. The tax will be charged to the operator who supplies electricity to the consumer. It will apply to supplies of electricity made on or after 1 October 2008. The rates of tax are being set at the minimum rates specified in the Directive; that is 50 cent per megawatt hour — which is 1,000 units - for business use, and €1 per megawatt hour for non-business use.

However, electricity used by households will be exempt from the new tax as will electricity produced from renewables and combined heat and power generation. Energy products and electricity used to produce electricity are also being exempted from excise taxation.

The tax will be paid over to the Revenue Commissioners in arrears, and consequently there should be no yield in 2008. It is estimated that while the electricity tax will have a gross yield of around €7m per annum thereafter, when the exemption from excise taxation of energy products and electricity used to produce electricity is taken into account the net Exchequer yield is estimated at under €1m per annum. The overall cost and impact of the measure on electricity prices and consumption patterns will be marginal.