Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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135. To ask the Minister for Finance if his Department has evaluated the sustainability of current expenditure levels in the event of a downturn in multinational corporation tax receipts. [54423/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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151. To ask the Minister for Finance given that the Government has increased its corporate tax forecast for 2026 to €34 billion despite the stalled OECD global tax deal, if he will publish the detailed revenue modelling underpinning this revision; the proportion attributed to the top ten multinational taxpayers; and the contingency plans if receipts fall back toward the earlier €28 billion forecast.; and if he will make a statement on the matter. [54441/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 135 and 151 together.

The Economic and Fiscal Outlook document published as part of Budget 2026 sets out the latest fiscal projections. It provides an update regarding the impact on revenues from the OECD’s Two Pillar Framework and notes that international tax negotiations are still ongoing. An estimate of c. €3 billion for next year was incorporated into the tax forecast for 2026. This reflects the additional tax revenue payable under Pillar II of the OECD discussions i.e. minimum effective tax rates for large firms.

The Economic and Fiscal Outlook also notes the concentration of corporation tax receipts is a key downside risk. The State sources over half of its corporation tax receipts from just ten firms, leaving this revenue stream exposed to adverse industry- or firm-specific developments.

I would point out that my Department has published model simulations regarding the potential impact of a fall in corporation tax receipts.  These are set out in last year's budgetary documentation. 

In order to mitigate this exposure, the Government has established two investment funds to set aside a portion of 'windfall' tax receipts and that we will maintain a safe and affordable approach to overall budgetary policy; at the end of next year, there will be around €24 billion accumulated in these funds.

Government is also targeting large budgetary surpluses as a risk mitigation strategy.  

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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136. To ask the Minister for Finance the projected reduction in greenhouse gas emissions expected to result from the five cent increase in carbon-related taxes on motor fuels; and if he will make a statement on the matter. [54492/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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137. To ask the Minister for Finance whether there is a scheduled review mechanism to assess the social and economic impacts of the carbon tax escalator on motor fuels; and if he will make a statement on the matter. [54494/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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138. To ask the Minister for Finance whether his Department has undertaken an assessment of the adequacy of rural and inter-urban public transport alternatives prior to the forthcoming 5 cent increase in green taxes on motor fuels; and if he will make a statement on the matter. [54495/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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139. To ask the Minister for Finance whether his Department has estimated the expected cost increase for daily commuters arising from the fuel tax rise, and whether a measurable modal shift away from private car use is anticipated; and if he will make a statement on the matter. [54496/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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160. To ask the Minister for Finance the expected annual revenue yield from the forthcoming five cent increase in carbon-related taxes on motor fuels; and whether this revenue will be ring-fenced for climate mitigation or general exchequer use; and if he will make a statement on the matter. [54487/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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161. To ask the Minister for Finance whether his Department has carried out a socioeconomic impact assessment of the forthcoming increase in green taxes on petrol and diesel, specifically regarding rural motorists, low-income households, and small businesses; and if he will make a statement on the matter. [54488/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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162. To ask the Minister for Finance the offsetting measures that are being considered for the commercial road haulage, taxi, and agricultural sectors following the forthcoming five cent increase in green taxes on motor fuels; and if he will make a statement on the matter. [54489/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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163. To ask the Minister for Finance where Ireland ranks among EU member states in terms of total excise duty and carbon tax applied per litre of petrol and diesel; and if he will make a statement on the matter. [54490/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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164. To ask the Minister for Finance if his Department has modelled the inflationary effect of the forthcoming carbon-related increase in motor fuel prices on consumer goods and transport costs; and if he will make a statement on the matter. [54491/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 136, 137, 138, 139, 160, 161, 162, 163 and 164 together.

The Carbon Tax is an environmental tax on fossil fuels based on the polluter pays principle.

Finance Act 2020 legislated for annual increases to the carbon tax of €7.50 up until 2029 and €6.50 in 2030, when the rate will reach €100 per tonne of carbon dioxide. This multi-annual rate trajectory provides a clear long-term signal to industry and society alike that our future involves a move away from fossil fuels. By maintaining the trajectory of annual carbon tax rate increases, our commitment to transitioning to a carbon neutral economy is reinforced. 

A €7.50 increase in Carbon Tax will increase the price of diesel by approximately 2.5 cents and of petrol by approximately 2.1 cents per litre, inclusive of VAT. The excise component of Mineral Oil Tax (MOT) is not changing and therefore this is the extent of increases to auto fuel taxes in this years budget. 

The additional revenue arising from the carbon tax increase is estimated at €121 million in 2026 and a full-year additional yield of €157 million.

The Programme for Government committed to continue with the planned Carbon Tax increases, aligning with recommendations from the Climate Change Advisory Council and scientific experts, and to using the resulting revenues raised to support climate action measures and to ensure the most vulnerable are protected from unintended impacts of the tax increase. This includes funding for retrofitting and agri-environmental schemes, alongside targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition. These measures are designed to be progressive.

To give effect to the Programme for Government commitment to protect the vulnerable, a targeted package of social protection interventions has been developed, which is informed by ESRI research that was commissioned to address this issue specifically.

In Budget 2026, a total of €1,114 million of carbon tax revenue is being allocated to climate measures and to ensure the most vulnerable are protected from unintended impacts of the tax increase. This is an increase of €163 million on the amount allocated in Budget 2025.

This includes allocations of €558 million to fund retrofit and energy efficiency schemes, €173 million to incentivise farmers to farm in a greener and more sustainable way, and €20 million to support sustainable mobility. In addition to climate mitigation, €350 million has been allocated to social protection interventions to ensure the most vulnerable in society are protected from the impacts of the tax.

Measures, relevant Departments, and the proportional allocation for each is outlined in tabular form below:

Analysis undertaken using SWITCH, the ESRI tax and benefit model, to simulate the impact of the carbon tax increase and the compensatory welfare package estimates that the net impact of the combined measures is progressive. Half of households are better off due to the measures part-funded by additional carbon tax funds, with households in the bottom four income deciles benefitting the most.

As regards offsetting measures for the agricultural sector, reduced MOT rates apply to fuels used for other purposes such as in agricultural tractors and machinery, as well as for heating. Diesel that is supplied at a reduced MOT rate must be marked with prescribed fiscal markers and is referred to as marked gas oil (MGO), or green/agri/farm diesel. Reduced MOT rates are significantly lower than standard rates, as illustrated in the table below which includes current MOT rates per 1,000 litres for auto-diesel and MGO.

With regard to the horticultural sector, heavy oil (MGO, kerosene, and fuel oil) and liquefied petroleum gas (LPG) used for qualifying purposes in horticultural production or mushroom cultivation are relieved from the MOT carbon component. In addition, a full relief from Natural Gas Carbon Tax applies to natural gas used for these qualifying purposes.

Furthermore, €173 million in Carbon Tax funding is being allocated to encourage and incentivise farmers to farm in a greener and more sustainable way (agri-environmental schemes) in 2026. This is a €30 million increase in funding year-on-year.

This increased funding will be used to fund the Agri-Climate Rural Environment Scheme (ACRES) – detailed in Ireland’s Common Agricultural Policy (CAP) Strategic Plan 2023.

With regard to the transport sector, the Diesel Rebate Scheme (DRS) is a State aid which provides a partial rebate of MOT to qualifying road haulage and bus transport operators, when the average retail price of auto-diesel exceeds €1.00 per litre excluding VAT. The DRS operates on a sliding scale basis, whereby the repayment rate increases gradually as the retail price increases, up to a maximum repayment rate of 7.5 cents per litre. The DRS repayment rate has been at the maximum level for almost four years.

In addition to tax measures that apply to certain fuel uses and/or users, MOT law provides for relief from carbon taxation for biofuels and vehicle biogas. This means that biofuels and vehicle biogas are not impacted by carbon tax increases and the lower effective MOT rates on these fuels apply across all sectors and uses.

These measures are designed to support industry and to help mitigate against any unintended price impacts on consumer goods and transport costs.

As regards the adequacy of rural and inter-urban public transport alternatives, while I appreciate that those people living in rural Ireland do not have the same public transport alternatives as those living in our cities, to suggest that there is no or totally inadequate public transport available in rural Ireland is not the case.

As set out in the National Development Plan, the Government is committed to strengthening rural economies and communities and enhancing regional accessibility, with a range of investments in new and existing public transport infrastructure. 

In addition, the Connecting Ireland Rural Mobility Plan is a major five-year national public transport initiative with the aim of increasing public transport connectivity, particularly for people living outside the major cities and towns.

Since it began in 2022, more than 175 new and enhanced services have been implemented connecting over 240 towns and villages to the public transport network. These routes have provided 41 Connections to higher education facilities, 61 connections to healthcare facilities, and 71 connections to existing rail services.

Approximately 600,000 people now have access to these new or enhanced bus services.

Almost 8 million passenger journeys were recorded across Connecting Ireland services in 2024. Where Connecting Ireland services have been implemented patronage has increased 38% from 2023 to 2024, indicating a measurable modal shift away from private car use.

In the new Programme for Government, Securing Ireland's Future, this Government has committed to increasing Local Link services in rural areas to better connect villages, towns and cities, and to continue the roll-out of Connecting Ireland and investment in new town services.

Moreover, the Government is making public transport more accessible in rural and regional areas for disabled and older people by retrofitting older transport infrastructure and facilities.

Funding under the Public Transport Retrofit Programme increased 67% in 2025 compared to 2024.

The Programme is funding the installation of accessible bus stops in regional areas, bus and train station accessibility improvements, and increasing the number of wheelchair taxis.

The Deputy had also asked where Ireland ranks among EU Member States in terms of total excise duties on fossil fuels, full data is not available to assess Ireland’s ranking in this regard. However, data is available to assess Ireland’s ranking inclusive of all taxes and charges, including VAT and excise duties.

In terms of the total tax applied per litre of diesel, Ireland ranks second in the EU as recorded on 29 September.

In terms of the total tax applied per litre of petrol, Ireland ranks sixth in the EU as recorded on 29 September.

More information and weekly updates on prices of petroleum products in all EU countries  is available on the European Commission’s website: energy.ec.europa.eu/data-and-analysis/weekly-oil-bulletin_en

In terms of the projected reduction in GHG emissions expected from the carbon tax, it is important to note that the carbon tax does not operate in isolation but is complementary to a suite of climate action policy measures including the national retrofit programme, uptake of Electric Vehicles, investment in public transport, uptake of environmentally friendly agricultural practices, the EU ETS among others. As such, it is not possible to isolate the specific impact of the carbon tax on emissions reductions.

However, overall, the Environmental Protection Agency report that emissions in the transport sector decreased by 1.2 per cent in 2024 compared with 2023.

Finally, the Deputy should note that taxation of energy products is reviewed on an ongoing basis.  Consideration of policy options has due regard to all relevant factors including the wider economic context, global energy market activity, consumer and business impacts, climate commitments and exchequer impacts.

The taxation of petroleum-related products was most recently examined in the Tax Strategy Group paper on ‘Energy, Environmental and Vehicle Tax’, published by the Department of Finance in July. The Tax Strategy Group papers are published in advance of the Budget to facilitate informed discussion. They form part of the overall Budgetary and Finance Bill process which includes the National Economic Dialogue, the Budget Oversight Committee and the provision of pre-Budget submissions and engagement with specific groups and individuals. Tax policies relating to fossil fuels are kept under ongoing review by the Department of Finance.

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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140. To ask the Minister for Finance if he will review correspondence (details supplied); if he will address the concerns raised; and if he will make a statement on the matter. [54236/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The 2020 Programme for Government committed to bringing in a targeted taxation regime to specifically discourage vaping and e-cigarettes, in order to support health and well-being objectives. The E-liquid Products Tax, legislated for in Finance Act 2024 and due to commence on 1 November 2025, achieves that aim.

Although e-cigarettes may be used as a cessation device in some instances, their popularity among young people is a primary public health concern, particularly due to the gateway effect these products can have in relation to the uptake of other nicotine or tobacco containing products. There is a strong public health rationale to support the increased regulation of e-cigarettes and vapes, including through taxation.

The HSE indicates that an e-cigarette product should be authorised by the Health Products and Regulatory Authority (HPRA) if it is marketed or promoted for a medicinal purpose, such as quitting smoking. In Ireland, no e-cigarette product currently on the market has a licensed indication for smoking cessation.

The National Stop Smoking Clinical Guidelines, which were published in 2022, do not recommend e-cigarettes as a smoking cessation aid. As these products have not gone through the same safety and quality checks as licensed stop smoking medicines, such as nicotine replacement therapies (NRT), they are not advocated as a cessation method. The World Health Organisation published its first global guidelines for smoking cessation in July 2024 and did not recommend e-cigarettes for smoking cessation on similar grounds.

The HSE offer a number of free programmes and supports to those who wish to stop smoking through the QUIT service, including a range of NRT which are offered free of charge from local stop smoking clinics. The free NRT is offered as part of a package of supports to those who wish to quit smoking. Furthermore, the E-liquid Products Tax will not apply to medicines licensed or authorised by the HPRA for the purposes of nicotine replacement therapy.

The introduction of the E-liquid Products Tax underlines Ireland’s ongoing commitment to safeguarding public health and tackling the increasing consumption of vapes and related products, particularly among young people.