Business Irish

Friday 15 December 2017

Irish taxman taking in €1bn more in environmental levies

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Paul O'Donoghue

Ireland took in €4.4bn in environmental taxes in 2013, an increase of over €1bn compared to a decade earlier, new data reveals.

Environmental taxes are made up of taxes on energy, transport and pollutants.

The data from statistics agency Eurostat showed that in the European Union, environmental taxes amounted to just over €330bn in 2013 compared to €272.1bn in 2003.

However, the share of revenue as a percentage of the total tax take dropped from an average of 6.9pc to 6.3pc across the 28 member states.

The percentage share fell in a majority of EU states with the largest drops recorded in Cyprus (-3.8pc from 2003 to 2013), Portugal (-3pc) and Malta (-2.5pc).

Ireland was one of the few countries that increased its environmental levies as a percentage of the total tax take.

The overall take increased from €3.3bn, or 7.9pc of the country's total tax and social contributions in 2013, to €4.4bn, 8.5pc of the total tax take in 2013.

Under the Europe 2020 strategy, which adopted a series of growth and development targets for the union in 2010, the objective for the EU is to reach a 10pc share by 2020.

Other countries that increased their proportion of environmental taxes included Estonia (up 1.9pc to 8pc), Slovenia (up 1.8pc to 10.5pc) and Bulgaria (up 0.6pc to 10.1pc).

Levies on energy costs accounted for 62pc of the environmental tax revenue in Ireland while charges on transport were responsible for 37pc.

However, the revenue generated by taxes levied on pollution and resources were not significant, contributing just 1pc of the total revenue raised, well below the EU average of 3pc.

The low contribution from taxes on pollution and resources comes despite the State taking in more than €1.6bn from the carbon tax on fossil fuels since its introduction in 2010.

The tax was introduced to encourage people to use renewable or alternative sources of energy, such as heating their homes with wood pellet stoves or using public transport where available.

The Environmental Protection Agency (EPA) has previously admitted that Ireland is unlikely to meet its carbon emission reduction targets.

Figures from Revenue Commissioners released earlier this year shows the tax bill from 'carbon tax', added to motor and heating fuel, cost consumers €385m in 2014 - up from €354m in 2012 and €223m in 2010.

The rate of tax, which was increased in stages, is €20 per tonne of CO2 emitted by the fuel concerned.

Under European Union commitments, Ireland is obliged to reduce its carbon emissions by 20pc from 2005 levels by the year 2020.

However the EPA found the likely decrease will be between 9pc and 14pc.

In his speech to the the United Nations climate change conference in Paris last week, Taoiseach Enda Kenny criticised the EU's target of a 20pc cut in greenhouse gas emissions from their 2005 levels by 2020 as "unrealistic" and "unreachable".

With the EU committed to a 40pc reduction in emissions by 2030, the Taoiseach said that Ireland would need "time and space" to meet these targets.

Irish Independent

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