McConalogue confirms MGO reduction
“As of May 1st2022, a further reduction of 3c including VAT for MGO will apply, bringing the overall MOT rate to €111.14 per 1000 litres.
“This reduced rate fully compensates for May 1st2022, increase in the carbon tax and will apply until October 11and2022.”
That’s the information Agriculture, Food and Marine Minister Charlie McConalogue passed on to MP Carol Nolan last Tuesday (April 26).and), when the Laois-Offaly representative asked about the price of fuel
She asked the minister about the aid he will provide to agricultural entrepreneurs to offset the rising cost of agrodiesel.
The Minister explained that the MOT includes a non-carbon component and a carbon component. The carbon component is commonly referred to as a carbon tax, and the non-carbon component is often referred to as “excise”, “fuel excise” or “fuel duty”.
The current MOT rate on MGO is €120.55 per 1,000 litres, which the minister said compares “very favourably” to the current rate applied to automotive diesel which is €405.38 per 1,000 litres.
The Minister of Finance reduced the MGO rate by 2 cents per liter including tax from March 10and. McConalogue said this reduction reduced the rate from €138.17 per 1000 liters to the current rate of €120.55 per 1000 litres.
McConalogue confirmed that a financial resolution will be presented to the Dáil to give effect to the changes, which he announced from May 1.st.
He said this would provide the legislative basis through an amendment to the Finance (Miscellaneous Covid) Bill 2022 before the Dáil.
Those who incur expenses in connection with agricultural diesel in the course of farming or as an agricultural entrepreneur can claim a deduction from income tax or corporation tax for these expenses. He said that includes any carbon tax imposed on diesel.
He pointed out that Section 664A of the Fiscal Consolidation Act 1997 provides further relief from expenses incurred by farmers in the event of an increase in the carbon tax on agricultural diesel.
This is an additional tax measure for farmers that the government introduced in the 2012 budget, which compensates for increases in the carbon tax compared to the 2012 base rate of €15/t of CO2 emissions.
This measure means that a farmer can benefit from an income tax or corporation tax deduction for agricultural diesel (including any carbon tax imposed on diesel).
In addition, they can also benefit from an additional deduction for agricultural diesel.
McConalogue said this equals the difference between the carbon tax charged and the carbon tax that would have been charged if calculated at the rate of €41.30 per 1,000 liters of agricultural diesel (the 2012 baseline).
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