Ireland's Green Tax Revenue to Dip With Climate Plan, Study Says - Bloomberg Tax

Ireland’s Green Tax Revenue to Dip With Climate Plan, Study Says

The impact on environmental tax revenues in Ireland must be considered as the country moves toward a reduced-carbon economy through climate change policies, a new study suggests.

Ireland’s Climate Action Plan 2023 lays out actionable items to achieve carbon neutrality by 2050 but doesn’t include the potential consequences of the transition away from fossil fuels.

“The transition to a lower carbon economy will have a significant impact on exchequer finances,” reads the Department of Finance study, referring to the revenue the country receives from taxes.

The study released Thursday notes the need for alternative sources of tax revenue—such as focusing on taxing road use as opposed to taxing individual vehicles—as people move toward using electric vehicles. Study authors also emphasize that any taxation policy must consider Ireland’s aging population by increasing the number of older workers and boosting the state pension age.

- Revenues from fossil fuel taxes are expected to fall from 5.3 billion euros in 2022 to 4.3 billion euros in 2030, the study found.
- Significant losses in revenue are expected from excise duty and value added tax on fuel, motor, and vehicle registration tax on fossil fuel vehicles, and carbon taxes.

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