Charlie McConalogue (Donegal, Fianna Fail)
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While primary responsibility for taxation policy is with the Minister for Finance, I continue to work closely with him to ensure that the tax code reflects the Government’s priorities for the agrifood sector and the economy generally.

On 9th March the Government announced a 20 cent reduction in the excise rate for petrol and a 15 cent reduction on auto diesel, with a proportionate 2 cent reduction for the excise on Marked Gas Oil (green diesel). These measures are VAT inclusive, costing an estimated €320m, and will last until 31 August 2022. Following these reductions, the overall excise rate for green diesel is some 12 cent per litre versus 41 cent per litre for auto diesel (on a VAT exclusive basis).

Regarding that 12 cent per litre, farmers continue to be eligible for a double income tax relief, which compensates for increases in the carbon tax element from the 2012 base rate of €15 per tonne of CO2 emissions. Section 664A of the Taxes Consolidation Act 1997 provides that a farmer may take an income tax or corporation tax deduction for farm diesel (including any carbon tax charged in respect of the diesel) and then a further deduction for farm diesel which is equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at the rate of €41.30 per 1,000 litres of farm diesel (the 2012 baseline). This equates to almost 5 cent per litre.

Different VAT rates also apply, 23% on auto diesel and 13.5% on green diesel.

My colleagues across Government and i continue monitor the situation closely.