Mass elimination of home heating oils confuses wording

The government insists that it is not possible to cut the excise tax on home heating oil because no such fuel tax is correct, despite some of the “horrible” wording in the documents. Technical shows otherwise.

TDs have criticized the Government for its failure to cut excise consumption of kerosene, the main household heating oil, in line with excise tax cuts on petrol and diesel was agreed overnight.

Responses from Government agencies did not help shed light on the situation, while Taoiseach Micheal Martin, who cited EU restrictions as the reason his hands were tied, only added to the confusion.

The confusion mainly stems from the classification system used by the Internal Revenue Service for various taxes – and politicians don’t understand it.

Revenue classified Mineral Oil Tax (MOT) is an excise tax and MOT applies to kerosene used for household heating purposes.

But it applies only to the “carbon component” of kerosene, and that is commonly known in public discourse and in budget day-to-day as something entirely different – the Carbon Tax.

Further confusion arises because in the Revenue documents this MOT “carbon component” is applied to kerosene at €84.84 per 1000 liters where a carbon tax is generally applied on per ton of carbon.

However, they are one and the same.

Liquefied petroleum gas (LPG) that is rarely used for home heating is treated in a similar way. There is no rate applicable to the non-carbon but carbon component or the Carbon tax rate of €54.68 per 1,000 litres.

For comparison, motor fuels have a high percentage of their non-carbon components, for example €379.24 per 1,000 liters of gasoline, plus a Carbon Tax.

Meanwhile, Michael Martin’s reference to EU restrictions seems to be rooted in rules that set a minimum excise tax to be imposed on energy.

The minimum for petrol and diesel is below what the Government cannot cut, but the minimum for home heating fuel is zero, already rates are here, so it cannot be reduced.

The government has said it will not cut carbon taxes on any fossil fuels.

The classifications used by Revenue are not intended to cause confusion but to conform to those used in the European Union.

An official dealing with the matter described the term as “appalling”. Mass elimination of home heating oils confuses wording

Fry Electronics Team

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