Tánaiste Simon Harris has defended the fact that over half of motor fuel prices go to the State, saying “we have to take in a certain amount of taxation to run the country.”
Speaking during an economic press conference yesterday, Harris, who also serves as Finance Minister, was responding to questions from Gript about the tax burden on fuel, with around 60% of the cost typically made up of Government taxes and levies.
Harris acknowledged that the figure may appear high to consumers, but argued that taxation is necessary to fund public spending and maintain services.
“In isolation, outside of a crisis, that sounds like a situation where people would say ‘I’d like to pay lower tax on my fuel’, and I get that,” he said.
“But I’d also just make the point respectfully to people that we do have to collect taxes to fund public services and we have to get the balance right here.”
He outlined the areas funded through taxation, including public services and infrastructure, and said the State must maintain revenue streams to support them.
“If we want a lower tax on work, you know, we have to take in a certain amount of taxation to run the country, to run education, to run our health service, to pay for state pensions, to make sure we can help build homes in this country, to deliver public transport projects,” Harris said.
“So there’s always a balance to this and I do think that’s an important point to make.”
Harris also pointed to Government efforts to support a shift away from fossil fuels, including incentives for electric vehicle purchases.
“We also have to help people with the transition away from fossil fuel – and I mean help by the way, help in terms of, for example, the purchasing of EVs and we’ve seen a very, very significant surge in that in recent times too,” he said.
He confirmed that a planned increase in carbon tax had been deferred, stating that while the Government supports the measure in principle, the timing was under review.
“We made a decision in relation to carbon tax acknowledging that while we believe in the principle of carbon tax, we had a carbon tax that the time wasn’t right to put it up and deferring that decision for further consideration at budget,” Harris said.
Separately, during the same press conference, Harris indicated that income tax measures would form part of the upcoming Budget, referencing commitments made during the 2024 general election.
“There has to be a personal income tax package in my view in the Budget this year and I’d like to see progress on that in each of the four budgets the Government will deliver,” he said.
The comments come amid rising fuel costs linked to the ongoing war in Iran, which has placed additional pressure on households and businesses. Fuel prices have fluctuated in recent months, with global energy markets affected by geopolitical instability and supply concerns.
Notably, Harris’ remarks come despite the Government enjoying multi-billion euro budgetary surpluses in recent years.