Increased Tax On Motor Fuel Would Damage Ireland – IPIA

The companies who import and distribute petrol and diesel have written to the Minister for Finance urging him resist attempts to increase excise on motor fuels as this would damage our competitiveness and hit rural Ireland particularly hard.

The Department of Finance Tax Strategy Group has pointed out that excise rates on petrol and diesel are amongst the highest in Europe and that this has a negative effect on Ireland’s ability to compete. That Departmental Tax Strategy Group is entirely misguided to suggest that the way to ‘equalize’ excise on petrol and diesel is to increase the tax on diesel. Any consideration of ‘equalization’ should be equalization downwards – that is a reduction in the excise on petrol.

Common sense tells us that increasing excise on diesel would not bring the shift away from diesel now sought by Government. Consumers can give up tobacco or alcohol overnight but a business cannot change its commercial fleet with such ease. Neither can those many rural dwellers, who have recently invested in diesel transport, abandon their vehicles. This is especially the case as the second-hand value of these vehicles would be undermined if the Government changed the excise rules.

The motorists most adversely affected by raising excise on fuel would be rural Ireland – those parts of the country in which people are most dependent on private transport, those areas in which economic recovery is least evident.

Increasing the excise on diesel would give further incentive to the criminal laundering of diesel.

Taken in conjunction with UK£ / euro exchange rate, any increase could lead to reduced return to Revenue from cross border movement;

The Irish Petroleum Industry Association – IPIA – is the representative body of those companies in Ireland engaged in the importation, distribution and marketing of petroleum products. Its membership represents about 95% of the oil industry in the Republic of Ireland.

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