“VAT did not feature significantly in the Budget, save for the reduction in the farmer’s flat rate addition, and confirmation of the application of the reduced 9% VAT rate to certain services in the hospitality industry until 31 August 2022.
With the upcoming climate action plan and carbon budgets still to be announced, areas that Government could look at in future would be to amend entitlement to VAT recovery on certain cars. Currently, partial recovery is permitted on cars with CO2 emissions of less than 156g/km. The Minister could have restricted VAT recovery on fossil fuel run cars and extended the scope of deduction on electric cars.”
“An increase in the threshold for the cash receipts basis of accounting for VAT would have been welcomed. It would have been another measure in support of small and entrepreneurial businesses in the State. An increase from €2 million to €2.5 million would have led to a one off cost to the Exchequer of €38.1m but an additional 1,824 businesses would have benefited from this increased threshold.”
“As expected, Budget 2022 sees a carbon tax rate increase of €7.50 from €33.50 to €41 per tonne/CO2 as Ireland continues efforts to lower carbon emissions. Whilst delivering on its commitments to reduce carbon emissions by means of phased, punitive tax measures, effectively the stick to change behaviours, it is not enough. The Minister said that Carbon Tax is the “single most effective climate policy which can be pursued by Government;” but without some tangible and easily accessible incentives to act as the carrot, the rate of change is and will continue to be too slow to achieve overall emissions reduction targets by 2030.”
“The granting of up to 50% excise relief to independent small producers of cider and other fermented drinks products is welcome given Ireland’s rate of excise on cider was the third highest in the EU. This reduction puts cider and other fermented drinks products on par with the craft beer sector which has enjoyed and reaped the benefits of a 50% reduced excise rate for the past 15 years. There are estimated to be approx. 75 independent micro-breweries in Ireland and the measures announced today should be very supportive to their future success. The date of implementation does not look likely to be until Finance Bill 2022, however the cost to the exchequer should be minimal.”
“Diesel and petrol prices will increase as of midnight tonight due to an increase in carbon tax from €33.50 to €41 per tonne. With inflation and overall costs of living rising, the increase in transportation costs will be felt by consumers, but is it enough to have them reduce their usage in the absence of better and more sustainable alternatives? Likely no.”
“The VRT relief for Battery Electric Vehicles of €5,000, which was due to expire at the end of 2021, has been extended for two years to the end of 2023. This is welcomed as the uptake in EVs is still not where it needs to be to meet our targets of one million EVs on the road by 2030, and every incentive helps.
“From 1 January 2022, a revised VRT table is being introduced. The changes will make high emission cars more expensive and should generate approx. €82 million for the exchequer. While this represents another stick to increase the uptake of EVs, in the absence of increased infrastructure to support the use of EVS nationwide, this measure will likely be limited in its success. It is hoped the infrastructure needs will be addressed in the upcoming carbon budget.”