Consumers hit with a €3BN yearly fuel tax bill
With corporation tax set to wane, are fuel levies the new State nest egg?
CONSUMERS have been hit with a record €3bn bill for fuel taxes and levies this year, the Irish Mail on Sunday can reveal.
The massive fuel costs have been confirmed by the Revenue Commissioners and in responses to parliamentary queries seen by the MoS.
And with further increases in carbon taxes planned for 2022, the figure is likely to rise even further next year.
The extent of the charges has sparked claims that rising fuel costs and heating levies will be used by the Government to offset anticipated cuts in corporation tax.
Motorists forked out more than €1.5bn on ‘mineral oil taxes’ for petrol and diesel in the 10 months to October 2021. A further €526.36m was raised from various carbon taxes in the same period.
Meanwhile, householders also paid €393m under the Public Service Obligation (PSO) levy to fund renewable energy projects.
And Revenue has confirmed petrol and diesel tax receipts swelled Exchequer coffers by a further €375m.
The figures bring the amount raised through fuel charges, carbon taxes and electricity levies in the first 10 months of 2021 to €2.858bn. And with two months of revenue still to come from mineral oil charges, VAT and carbon taxes, the total figure for 2021 is expected to easily surpass €3bn.
To date, the Government’s sole response to the impact of soaring prices and increasing taxes consists of a universal rebate of €100 on electricity bills, which amounts to an estimated €170m.
However, consumer leaders warned this weekend that this relief will be ‘short-lived’ as the bills stack up in the new year.
Dermot Jewell of the Consumers Association of Ireland told the MoS: ‘The €100 allowance in the new Year will take some of that worry away but it will be only short- lived.’
Amid growing concern as inflation reaches its highest level in 20 years, Mr Jewell said: ‘These figures reflect the reality of how challenging it is for the average consumer to comprehend such vast sums. It is only on their bill that they can realistically focus and, for many, in terms of all fuel and energy-related prices, they are, or soon will be, finding costs to be cumulatively worrying and a challenge.’
Mr Jewell said that instead of the €100 rebate, a reduction in the VAT rate on all fuels and energy bills ‘would be more effective across the board and especially for businesses – who will inevitably pass on their costs to the consumer’.
He said: ‘A reduction in tax could be short-term and reversible unlike price increases on goods and services which are proven over many years to be not just for Christmas.’
Commenting on the scale of the levies, Fianna Fáil’s Willie O’Dea said: ‘It looks as if carbon taxes are becoming the new corporation tax for the Government.
‘At a time where corporation taxes are anticipated to be down by €2bn and carbon taxes are soaring towards €3bn, it is clear carbon taxes are being used to fill that hole.’
The Limerick TD said the levies are having ‘a seriously inflationary impact on the lives of working families in particular’.
He said: ‘The Government talks about mitigating the impact with fuel allowances, but fewer than half of social welfare recipients, and absolutely no low and middle-income families, will benefit.
‘These taxes are utterly regressive. Corporation tax at least hit profits. These, in contrast, target lower and middle-income families.
‘We have moved from taxing multi-millionaires and billionaires to taxing nurses and plumbers. It is not exactly social equity in action.’
Mr O’Dea also warned the taxes ‘will hit industry and jobs in the long run’.
In responses to queries from the MoS, Revenue confirmed €1.564bn was raised from mineral oil taxes, consisting of €1.158bn for diesel, €359.4m for petrol and a further €46.52m for marked gas oil in the 10 months to October.
The Commission for Regulation of Utilities confirmed to Independent TD Carol Nolan that householders paid €393m in PSO levies during the same period.
Meanwhile, the Department of Finance has confirmed, in response to parliamentary queries from Sinn Féin TD Darren O’Rourke, that the State raked in over €500m in carbon taxes between January and October 31.
Wexford TD and former president of the Irish Road Haulage Association Verona Murphy warned rising carbon taxes would drive inflation ‘across the economy’.
She told the MoS: ‘Carbon and fuel taxes are the Government’s little nest egg. They know about it but don’t want to do anything about it.
‘This is going to drive inflation across the economy and lower income earners will suffer the most.’