Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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119. To ask the Minister for Finance if the VAT rate of 9% for the tourism and hospitality sector will be extended beyond February 2023 in view of the cost-of-living crisis and the pressures facing businesses; and if he will make a statement on the matter. [46194/22]

Christopher O'Sullivan (Cork South West, Fianna Fail)
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131. To ask the Minister for Finance his plans to extend the 9% VAT rate for the hospitality sector; and if he will make a statement on the matter. [46257/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 119 and 131 together.

As the Deputy will be aware, it is a long-standing practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decision.

Cathal Crowe (Clare, Fianna Fail)
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121. To ask the Minister for Finance his plans to introduce new personal taxation treatment to encourage stay at home parents to enter part-time employment in strategic areas (details supplied);; and if he will make a statement on the matter. [46101/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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With regard to the Deputy’s proposal to introduce new personal taxation treatment to encourage stay at home parents to enter part-time employment in strategic areas, I understand the rationale behind the Deputy's question. At the same time, the sectors mentioned by the Deputy are not the only sectors that are currently facing recruitment challenges in what is fortunately a very buoyant labour market. As such, it would in my view be potentially inequitable to single out certain sectors for particular treatment through the personal tax system.

The Home Carer Tax Credit can be claimed by couples who are married or in a civil partnership and have elected to be jointly assessed to tax, where either spouse or civil partner, the ‘home carer’, cares for one or more dependent persons. For 2022, where the home carer earns less than €7,200 the full credit of €1,600 can be claimed. Where the individual earns more than €7,200 but less than €10,400, a reduced tax credit can be claimed. The credit cannot be claimed where the home carer’s income is €10,400 or greater. As such, the home carer can undertake part-time employment, subject to the above income thresholds, and continue to avail of the Home Carer Tax Credit.

This credit was introduced in the context of the move towards individualisation, in recognition of the choices made by families where one spouse stays at home to care for children or the elderly.

The Programme for Government states that “the Home Carer Tax Credit is an effective mechanism to support couples where one decides to home parent rather than working or availing of childcare subsidies and also where one parent stays at home to meet other caring needs. It will be increased to support stay-at-home parents as we increase subsidies for childcare”.

Finally, with less than a week to go to the Budget, it would be inappropriate for me to comment further on any matter that may or may not be the focus of budgetary decisions.

Brian Leddin (Limerick City, Green Party)
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122. To ask the Minister for Finance his views on reforming motor vehicle taxation to improve energy efficiency of the car fleet in Ireland and uphold the tax revenue; and if he will make a statement on the matter. [46327/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Recent Budgets have seen major changes to Motor Tax and VRT structures with the aim of incentivising the purchase of more efficient and 'greener' vehicles.

Budget 2021 saw the transition to the more accurate Worldwide Harmonized Light Vehicles Test Procedure (WLTP); and restructured the VRT and motor tax regimes with a view to strengthening their environmental rationale in line with Government commitments as set out in the Programme for Government and Climate Action Plan. The VRT rates were changed again in Budget 2022 to increase the fiscal gap between low emission vehicles and the rest, thus incentivising motorists in the market for a new car to make ‘greener choices’. The structure is based on the 'polluter pays' principles, with a reduced rate for battery electric vehicles (BEVs) of 7% of open-market selling price (OMSP), while vehicles falling into the highest emissions band are liable to a rate of 41%. Similarly, in motor tax, WLTP-tested vehicles are charged motor tax according to their emissions profile; the rate for BEVs is €120 and scales up to €2400 for the most pollutant vehicles.

Budget 2020 introduced a VRT surcharge on nitrogen oxide (NOx) emissions in recognition of the environmental health costs caused by pollutants emitted in particularly high quantities by diesel vehicles. Budget 2021 saw an adjustment to the NOx surcharge structure by increasing rates to incentivise the uptake of cleaner cars.

There are also a broad range of measures in support of Climate Action Plan commitments to increase the electrification of the fleet. This include a €5,000 VRT relief, SEAI purchase grant, low VRT and motor tax rates, and a €50,000 Benefit-in-Kind exemption for Battery Electric Vehicles.

I am satisfied that the current vehicle taxation regime is based on an environmental rationale which incentivises low emission vehicles and consequently provides strong disincentives for the most polluting ones. Officials from my Department keep vehicle taxes under review as part of the Tax Strategy Group process.