John McGuinness (Carlow-Kilkenny, Fianna Fail)
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76. To ask the Minister for Finance the number of meetings he and his Department have had with the Solid Fuel Trade Group; if his Department has concluded an impact assessment of carbon tax on the fuel industry and on the cost of fuel to the end user; if there are cost forecasts with regard to regulation and the impact of such regulation on costs; his plans to establish a register of coal wholesalers, retailers and importers, between his Department and the Revenue Commissioners; the value of the shadow economy in this area; the actions being taken by his Department to reduce and eliminate such activity; and if he will make a statement on the matter. [22801/15]

Michael Noonan (Limerick City, Fine Gael)
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The introduction of Carbon Tax was about sending a price signal that there is a cost associated with the consumption of fossil fuels to the detriment of the environment. It should be noted that as solid fuels have the highest carbon content of all fossil fuels they are considered the dirtiest fuels and given the environmental impact it is important that they are taxed.

When introducing the carbon tax I was acutely aware of the impact it would have on the price of fuel.  Taking the above into consideration I did not commence the application of carbon tax to solid fuels until a regulation was developed and introduced ensuring that all bituminous coal contained less than 0.7% sulphur.  Further to allowing for the development of that arrangement when the carbon tax on solid fuel commenced it was introduced on a phased basis over 2 years.

My officials and officials from Revenue meet with the Solid Fuel Traders Group on a ongoing basis.  More recently, these meetings have been largely to discuss the development of a relief from carbon tax on the biomass element of solid fuel. 

The Revenue Commissioners, who are responsible for collecting solid fuel carbon tax (SFCT), advise me that while there is no reliable estimate of the value of the shadow economy in the solid fuel sector, they are very aware of the risk of such activity, particularly given the price differentials with Northern Ireland and the absence of controls for tax purposes on cross-border supplies. The application of the tax is heavily dependant on the regulatory regime for coal put in place by the Department of the Environment, Community and Local Government in 2011. This regulatory regime establishes higher environmental standards for coal supplied in the State compared with Northern Ireland, and provides for enforcement of those standards by the local authorities.  Suppliers who produce or supply solid fuels in contravention of the coal regulations are subject to investigation and prosecution by local authorities and other State agencies charged with preventing such supply. Revenue liaises with these bodies, as required, to ensure that lawful supplies of solid fuels are properly taxed.  The coal regulations provide also for the establishment of a register of coal suppliers by the Environmental Protection Agency.

I am advised by the Commissioners that solid fuel traders who make taxable supplies of solid fuel are obliged to register with them for tax purposes and SFCT is subject to the full range of compliance interventions and enforcement provisions for self-assessed taxes. In circumstances where there are grounds to believe that tax due has not been paid, Revenue investigates the suspect person's tax liabilities and collects any unpaid tax, including unpaid income tax, SFCT and VAT, together with any interest or penalties due.

As part of its work against the shadow economy, Revenue chairs the Hidden Economy Monitoring Group (HEMG) to facilitate the reporting of information by traders through their representative associations. Solid fuel traders who suspect, or have evidence, that illegal and/or untaxed solid fuel is being sold in their area should report any information to their local authority and Revenue. Revenue has held a number of meetings with suppliers on matters relating to untaxed supplies of solid fuel and, in common with all such reports, the information received is treated confidentially and is investigated fully for evidence of unpaid tax liabilities.