Rose Conway-Walsh (Mayo, Sinn Fein)
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41. To ask the Minister for Finance the estimated revenue that would be generated from applying a 1.2% levy on revenues of energy company, as has been introduced in Spain; and if he will make a statement on the matter. [27627/24]

Jack Chambers (Dublin West, Fianna Fail)
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As a small open economy, connected to Europe, the US and the wider world, Ireland is committed to a competitive, transparent and stable corporation tax system. As the Deputy will be aware, the trading profits of companies in Ireland are generally taxed at the standard corporation tax rate of 12.5%, and under the Pillar Two Minimum Tax Directive the effective rate has increased to 15% for in-scope companies.

Imposing additional taxes or levies on certain sectors would involve increased complexity and could change the attractiveness of Ireland's corporate tax regime. While it is possible that imposing an additional fiscal burden could lead to theoretical gains, there is a risk that this imposition could lead to lower levels of economic activity and to companies passing the additional burden onto their suppliers or consumers.

In relation to introducing a levy on energy companies, a number of factors would need to be considered. Firstly, there is the potential of higher prices for energy consumers who have only recently seen very welcome reductions from previous historic highs, this being at a time of significant cost of living pressures. The proposed levy could also have a negative impact on employment levels in energy companies if cost-cutting measures are introduced in response. Finally, the proposed levy could reduce competition in a sector that has previously seen the departure of a number of energy providers.

The Deputy may be aware that, outside of corporation tax on energy company profits, there are a number of taxes already applied to energy products in Ireland, including the Mineral Oil Tax, carbon tax, electricity tax and VAT. There are also certain levies on some energy products and these are under the remit of the Minister for the Environment, Climate and Communications.

Finally, the Deputy will be aware that, arising from an EU Regulation introduced in late 2022 to alleviate pressure then affecting energy consumers due to, among other factors the war in Ukraine, two revenue raising measures were introduced for years 2022 and 2023. Firstly, a Temporary Solidarity Contribution (TSC) was levied on Irish fossil fuel producers for years 2022 and 2023. Secondly, an electricity market price cap was placed at varying levels on the market revenues of electricity providers located here. Both of these measures are under the remit of the Minister for the Environment, Climate and Communications.

For these reasons I don’t propose to introduce a levy on energy companies in the terms set out.