Noonan says no to high tax green diesel
Recommendations made this week by Retail Ireland included equalising taxes for agricultural and motor fuels, in order to control oil laundering. And Carlow-Kilkenny Labour TD Ann Phelan has also called in the Dáil on Finance Minister Michael Noonan to consider using other methods of subsidising agricultural fuels, in the fight against laundering.
Mr Noonan said changing from reduced tax to refunds would require an extensive repayments system, with considerable administrative burden and costs for oil traders, Revenue, and users of agricultural diesel and home heating oil. Such repayment systems are vulnerable to abuse and likely to be exploited by criminal elements, and oil can also be laundered from British fuel, the minister pointed out.
“For these reasons, the intention is to ensure that controls relating to the sale and distribution of oils, and enforcement action in combating illegal oil laundering activity, are as effective as possible,” he told Dáil Eireann.
Diesel for agricultural use is marked with a green dye, and is subject to lower excise tax and VAT than diesel for road use. The resulting tax differential is about 50 cent a litre.
According to Retail Ireland, illegal fuel laundering criminals remove the dye from agricultural diesel which costs about 70c per litre, and sell it for about €1.30 to €1.35 per litre, which is 10c below the market price.
Revenue staff have seized 228,000 litres of laundered oil in 2010, and 327,000 litres this year.
According to Retail Ireland, illegal laundering costs the State at least €150 million in lost tax revenue every year, and at least 12% of diesel sold in Ireland is illegal.
