Written answers

Wednesday, 4 June 2008

10:00 pm

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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Question 144: To ask the Minister for Finance his view of the French call on the EU to sanction a reduction in VAT on fuel in order to alleviate the increased costs imposed on fishermen and farmers. [21941/08]

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)
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Question 150: To ask the Minister for Finance his views on whether changes could be made in relation to taxation and VAT which might provide relief for fishermen currently feeling the impact of rising fuel prices. [21940/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 144 and 150 together.

The increase in oil prices is an international phenomenon which is impacting across all sectors of the economy and of society.

I would draw to the Deputy's attention that, in terms of excise duties, fuel used by fishermen and farmers is already treated favourably compared to fuel used by other sectors. It should also be noted that the VAT content of purchases of auto-diesel and marked gas oil (MGO or green diesel) used in the course of business is a deductible credit for business in the Irish VAT system.

In relation to providing assistance to industries to compensate for the increase in oil prices, at the Informal ECOFIN in September 2005, the Ministers agreed that distortionary fiscal policy interventions, in response to changes in prices, that prevent the necessary adjustments should be avoided. This continues to be the appropriate policy response.

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