Michael Lowry (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

82. To ask the Minister for Finance the number of seizures conducted by customs officials on illegally imported solid fuels in 2021 and 2022; and if he will make a statement on the matter. [15687/23]

Michael Lowry (Tipperary, Independent)
Link to this: Individually | In context | Oireachtas source

83. To ask the Minister for Finance the amount of funding that has been provided to the Revenue Commissioners in the years 2021, 2022 and to date in 2023 to combat smuggling of solid fuels; and if he will make a statement on the matter. [15688/23]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 82 and 83 together.

Ireland’s tax law provides that the first supply of coal and peat in the State is subject to excise duty, in the form of Solid Fuel Carbon Tax (SFCT). SFCT applies at different rates to four categories of solid fuel: coal, peat briquettes, milled peat and other peat. SFCT is collected by Revenue on a self-assessment basis and compliance with SFCT law is enforced using the full range of compliance interventions and enforcement provisions for self-assessed taxes. It is only when solid fuels are first supplied in the State that an SFCT liability arises, and the supplier must account for and pay this liability to Revenue. It is important to understand that SFCT is not an import duty and neither the movement of solid fuels into the State from third countries or from other Member States, nor their physical presence in the State, generate a tax liability. Therefore, smuggling offences of the type envisaged by the Deputy’s questions do not exist in Irish tax law in relation to solid fuels.

Currently, solid fuels are generally cheaper in Northern Ireland (NI) than in the State. The price differentials arise for several reasons including the lower VAT rate and absence of a carbon tax (analogous to our SFCT) in NI. In addition, the environmental standards regime applying to solid fuels in NI allows for the sale in that jurisdiction of lower quality solid fuels, which can be cheaper than solid fuels that meet the required environmental standards in this State. I understand that this is particularly relevant with regard to coal as there are no restrictions in NI on the sale or use of smoky coal, which is significantly cheaper than smokeless coal.

I am advised by Revenue that it is aware of solid fuel supplies in the State which are suspected to have originated in NI. While the Deputy refers to these as “illegally imported solid fuels”, he will be aware that rules on the EU Single Market preclude the use of any cross-border controls in the administration of a tax such as SFCT. He will also understand that – in accordance with the Protocol on Ireland and Northern Ireland and reiterated in the recent Windsor Framework – the movement of goods between Northern Ireland and an EU Member State is essentially treated as a movement of goods within the EU. As a result, solid fuel coming into the State from other Member States and NI is not subject to cross-border movement controls typical of harmonised excises on mineral oils, tobacco and alcohol. There is no requirement for such movements of solid fuel to be declared to Revenue, nor is there any requirement for solid fuels to enter tax warehouses or a duty suspension regime. Essentially, solid fuels being brought into the State from NI, or another Member State, enjoy the same freedom of movement that applies to most other goods.

The importation of solid fuels that do not comply with Ireland’s environmental law and standards is not an offence under tax law, and Revenue has no role in instigating prosecutions for breaches of environmental law. Such matters come within the responsibility of local authorities. The Air Pollution Act 1987 (Solid Fuels) Regulations 2022, which were introduced in October last year, significantly enhance the State’s regulatory regime underpinning environmental standards for solid fuels. The regulations empower Local Authorities to take enforcement actions, including prosecutions, against solid fuel producers, importers, distributors, retailers, and users to ensure all solid fuels placed on the market and used in the State comply with relevant standards. The regulations place specific obligations on anyone transporting solid fuels, including requirements that accompanying documentation, detailing fuel source, destination and compliance with environmental standards are available for inspection by Local Authority staff. Further information on the operation of the regulations can be found atwww.gov.ie/en/publication/e3da2-air-quality/#new-solid-fuel-regulations.

Nonetheless, while Revenue does not have a direct role itself in relation to these environmental enforcement matters, Revenue is aware of the benefit that inter-agency enforcement co-operation can bring to the effective implementation of the range of State laws applicable to a sector. In this regard, Revenue have participated in several joint operations with other agencies including Local Authority solid fuel inspection teams, with a view to checking for compliance across several tax headings, including SFCT. Revenue is currently actively engaging with Local Authorities with a view to participating in future joint operations.