ELECTRICITY companies in- cluding the ESB should face a €300 million windfall tax which could be used to cut the 13.5 per cent VAT rate which would benefit every family by €200 a year, Fine Gael has declared.
Under changes made by the energy regulator last year, power companies are able to pass on the cost of carbon emissions to customers, even though they do not have to pay for the carbon they produce until 2013.
“They are charging for something that they themselves have not paid for. And the public should not have to be paying this bill,” Fine Gael Cork South Central TD Simon Coveney has declared.
A one percentage point cut in the 13.5 per cent VAT rate to 12.5 per cent would boost the economy, particularly indigenous industries and the building trade, and cut the formal inflation rate by 0.2 per cent a year.
Fine Gael leader Enda Kenny said the Government “stubbornly refuses to recognise the seriousness of our economic slide, or persists in blaming external factors”, such as the international credit shortage.
The Spanish government is already imposing windfall carbon levy taxes on energy firms, while the British government is considering doing the same thing but has not yet made a final decision.
The Minister for Communications, Energy and Natural Resources, Eamon Ryan, is expected to reject the proposal today in the Dáil. The ESB last night said the issue was for the Government.