Madam, – The proposed introduction of a carbon tax on domestic fuels, announced recently by the Commission on Taxation, is ill-conceived and ill-timed.
The most obvious result of the introduction of such a tax would be the increased supply of domestic fuels from Northern Ireland. At a time where businesses throughout the country are suffering, the proposed increase of €2.56 per bag of coal, and 48 cent per bale of briquettes would create a substantial risk of illegal imports from Northern Ireland, as a result of further widening of the price gap.
Domestic fuels in Northern Ireland are exempt from environmental taxes and enjoy a rate of 5 per cent Vat, compared to the current 13.5 per cent Vat rate in the Republic.
While I do not disagree with the idea of a carbon tax, careful consideration has to be given to its implementation. Due to the cash nature of the solid fuel market and with few barriers to Border entry, the introduction of this proposed tax will exacerbate an already problematic area in black market activity. This will result in a significant loss of revenue to the State in tax. This is not just a Border issue; the less well off in society will be disproportionately affected as they spend more of their income on solid fuels.
The Government needs to rethink its position on the introduction and implementation of a carbon tax. Failure to do so will not only have environmental consequences for the country but serious economic and social ones too. – Yours, etc,