Minister for Agriculture, Food and the Marine, Charlie McConalogue, has said that he will “fight tooth and nail” to maintain the current tax policy on green diesel.
Speaking to Agriland during the government-led trade mission to Asia, the minister said that this is “absolutely essential”, particularly in light of the rising costs faced by farmers.
The issue has come under the spotlight in recent weeks following two separate recommendations to government.
The Commission on Taxation and Welfare recommended that Minister for Finance Paschal Donohoe remove the excise duty concessions on all fuels, including green diesel.
The commission was tasked by the government to carry out a year-long review on how the tax and welfare system can support economic activity and promote increased employment.
Commenting on the recommendation, Minister McConalogue said that “things have changed significantly” and the government’s key focus will have to be on the costs facing farmers and families.
In its pre-budget submission, the Tax Strategy Group (TSG) recommended that the government to signal a change in policy to farmers this year, but added that such a move should be deferred until a later date due to current
“On the grounds of equity, the case for a continuation of section 664A for farmers is not a strong one,” it stated.
Introduced by the government in 2012, section 664A aims to insulate farmers from any carbon tax increases above the rate of tax that applied in 2012 (€41.30/1,000L).
The minister said that he has discussed the matter a number of times previously with officials from the Department of Finance.
“Obviously, there are issues across the economy, but I’m certainly aware of the costs that are on farmers, the costs that are on contractors and certainly I will be having that discussion as well with Minister Donohoe in advance of the budget,” he said.
McConalogue said that he is looking at all options which are possible in relation to reducing costs for farmers – however, he did not specify what that may entail.
Meanwhile, the minister said that the government could not guarantee the country would avoid electricity blackouts later this year.
He added that work is ongoing between the government, the Commission for Regulation of Utilities (CRU), EirGrid and industry stakeholders on the issue.
“The government’s absolute priority is working to ensure that we maintain energy supply over the course of the winter and spring ahead. There’s obviously challenges right across Europe, challenges we didn’t have before.”
Last month, EirGrid issued two amber alerts, indicating a narrow gap between electricity supply and demand.