Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that the possibility of an arrangement of the kind referred to by the Deputy has been examined in the context of substituting marked diesel with a general excise repayment scheme for qualifying consumers across all sectors. It was considered, however, that it would impose significant cashflow and administrative costs on businesses and consumers, pose serious control and enforcement risks and have substantial resource implications for Revenue.

In relation to substituting marked diesel with a VAT-only rebate scheme specifically for the agricultural sector as suggested, this has not been considered. However, it should be noted that VAT-registered operators in the agricultural sector are entitled to a VAT input credit for diesel purchased for purposes of their trade and for VAT-unregistered farmers, the farmers' flat-rate credit is already designed to compensate farmers, on an overall basis, for VAT suffered on their inputs, including diesel, used for farming purposes.

While there are no proposals to introduce a system along the lines suggested, this whole area is being kept under review in light of the increasing evidence of fuel laundering. Discussions are taking place with business representatives with a view to improving controls, and Revenue is working closely with Her Majesty's Revenue and Customs in Northern Ireland to manage the risk on an all-island basis.