Taoiseach not ruling out cutting excise on alcohol

Taoiseach Micheál Martin has not ruled out cutting excise on alcohol as part of next month's Budget.

The Government slashed the VAT rate for the hospitality sector as part of last year’s budget, with the rate for food services coming down to 9% from 13.5%.

It was reported that a similar measure has been mooted to help pubs, as the cut in last year’s VAT rate applies only to food and non-alcoholic drinks.

Mr Martin said that ministers have discussed income tax issues ahead of the Budget but have not moved into specific areas.

"But of course, given the propensity of the industry itself to raise the cost of alcohol, in terms of the price of a pint, which varies in terms of locations, we will look at different sectors in the round," Mr Martin said on Wednesday.

"Are there other mechanisms that can be used to support them? But that issue hasn’t surfaced at any talks we’ve had."

The Irish Examiner reported that Minister for Enterprise Peter Burke is in support of an excise cut, particularly as a measure to help rural pubs.

Meanwhile, Mr Martin rejected suggestions there are tensions within the coalition Government over any plans to pause carbon tax increases next month.

It comes as Tánaiste Simon Harris questioned the timing of planned hikes, particularly after two "massive global shocks" to energy prices.

But Mr Martin said that the carbon tax increase still needs to be discussed.

"The reality is of course that the revenues from the carbon tax trajectory, as provided for in legislation, is baked into the National Development Plan expenditure profile, particularly at the Department of Climate, and also in terms of fuel poverty and in terms of supports for farmers," Mr Martin said.

"The carbon tax revenue goes to farmers in terms of environmentally friendly farming initiatives. It underpins a lot of the fuel poverty allocation in terms of the fuel allowance and so on and the retrofitting agenda that has been so transformative and all that has to be worked out.

"All of those things fall for discussion but those are the issues that have to be reconciled because one of the purposes of the retrofitting and solar is to make things cheaper for people energy-wise.

"For those who have benefitted from the grants for retrofitting, things are getting cheaper on the energy front but I would acknowledge not everyone has been in the position to benefit from grants and various supports.

"Minister (Darragh) O’Brien is looking at other initiatives that he can take in respect of solar to really enable people and empower people to bring the cost of energy down.

"That’s the real transformation that has to occur."

Mr Harris said that while he is a supporter of carbon tax, its trajectory was set before the wars in Ukraine and the Middle East.

Mr Harris said: "I am confident the measures we put in place are the right economic measures for Ireland right now.

"From an economic point of view, I am confident because we know it helps supress inflation and we shouldn’t forget that means it helps keep the cost of food down in the supermarket.

"While we did fuel measures last week, it was actually about a lot more than fuel, it was about helping manage inflation.

"Often governments around the world will find themselves chasing inflation, so to pursue a policy that helps suppress the growth of inflation is a sensible thing to do.

"I am supporter of the carbon tax, it’s in the Programme for Government but the trajectory for the carbon tax was set before the war in Ukraine, before President Trump and Iran was involved in this conflict.

"In other words, the trajectory for the carbon tax was set before there was two massive global shocks to energy prices.

"That merits reflection."