Tuesday, 11 June 2019
Department of Finance
Tax Reliefs Costs
A relief on Mineral Oil Tax (MOT) paid on auto-diesel purchased within the State by qualifying operators is provided for by Section 99A of the Finance Act 1999 (as inserted by Section 51 of the Finance Act 2013). The repayment amount is calculated by reference to a sliding scale based on the average price at which auto-diesel is available for purchase during a repayment period. The maximum relief is 7.5c per litre for fuel purchased at €1.25 (VAT exclusive) and no relief applies where the purchase price is €1.00 (VAT exclusive) or less. For each 1c in the price above €1.00, the repayment is 0.3c per litre, as shown in the following table.
|Price (euro per litre, excluding VAT)||Amount repayable (cent per litre)|
It is assumed the Deputy means to decrease the floor at which the scheme becomes available to €0.85 (VAT exclusive) while maintaining the current €1.25 (VAT exclusive) ceiling and the 0.3c per litre repayment rate (above the new floor value). With these assumptions the maximum rebate rate per litre increases from 7.5c to 12c.
The following table shows the estimated cost of the proposal for a range of possible volumes of diesel and VAT exclusive prices. To provide some context, the largest annual volume claimed under the scheme to date was 413 million litres in 2014 while the current (VAT exclusive) price per litre of diesel is approximately €1.11.
Taking the largest annual volume claimed to date (413 million litres in 2014) and applying the proposed change to the scheme would result in an estimated cost of €50 million if all claims were based on the (VAT exclusive) price of a litre of diesel being €1.25 or greater.