| 11.4°C Dublin

'Stop dyeing green diesel to save taxpayer €600m a year'

ELIMINATING 'green' diesel would save the Government more than €600m a year and hit criminals engaged in fuel laundering.

The idea is outlined in a budget plan for 2014 unveiled by Social Justice Ireland.

In Ireland, diesel for agricultural or industrial purposes carries lower rates of tax and duty and is dyed green to distinguish it from diesel for everyday use.

"The State spends €600m each year dyeing 1.25bn litres of fuel," the group said.

Also, fuel laundering, where criminals wash out the green dye and then sell it on as regular diesel, costs the State an estimated €150m a year.

The State's fuel-dyeing process should be discontinued and a rebate system introduced for road hauliers, bus and coach operators and farmers, it said.

"The rebate system would cost €48m for farmers, €4m for coach operators and €70m for road hauliers.

"The cost of introducing the rebate system would be €122m in 2014," the group said. "The remaining savings of €628m should be invested in productive activities designed to boost domestic demand, develop Ireland's infrastructure and create jobs.

"By introducing a rebate system, the Government would save a considerable amount of money while significantly impacting on fuel laundering and criminal activity."

It also suggested a new tax on SMS texts: one third of 1c levied on an estimated 11.7bn SMS messages a year would raise €35m in 2014.


And a 2pc tax on salt, alcohol, sugar and trans fats would yield €15m, it said, while increasing the tax take on online gambling to 5pc would yield €100m.

"There should be no more expenditure cuts in Budget 2014," Dr Sean Healy, director of Social Justice Ireland, said.

"It's long past time the Government realised austerity is not working for Ireland."

The group suggested that for Budget 2014, there should be:

* No more cuts in expenditure (except where they flow from reforms and don't damage the social infrastructure);

* A reduction in borrowing of €3.1bn in 2014 as agreed with the Troika;

* A minimum effective corporation tax rate of 6pc;

* A maximum effective income tax rate of 45pc ;

* A Financial Transactions Tax of 0.01pc;

* A universal State pension;

* An increase of €5 a week in the PAYE tax credit and in the basic social welfare rates;

* A capital programme focused on developing physical and social infrastructure.