In December I posted a piece suggesting that the amount of money received by the Revenue Commissioners in Mineral Oil Tax was far below what it should be. New readers may wish to know that, under an insane system introduced by the Irish government to give the impression of complying with a European Union ruling, owners of private pleasure-craft are allowed to buy cheap green (rebated) diesel (marked gas oil) but are supposed to pay to the Revenue the difference between the amount they paid at the pumps and the amount that would have been paid without the rebate. This difference is called Mineral Oil Tax.
Having discovered the total amount received by the Revenue, and deduced from that the number of litres on which the tax was paid, I wrote:
Let us suppose, for the sake of argument, that the average pleasure craft has a 40hp diesel engine (which is what my 1960s cruiser had). That would use two gallons or nine litres per hour. So the 313,748 litres of diesel on which Mineral Oil tax was paid [for the year 2010] would have kept one cruiser going for 34,861 hours.
On the other hand, if there are 10,000 pleasure craft in Ireland, with diesel engines averaging 40hp, then they are claiming to have cruised for an average of three and a half hours each in the whole of the year 2010.
I suspect therefore that there is significant underpayment of the Mineral Oil tax and I suggest that the system should be abolished: boat-owners should pay the full (auto diesel) price.
I later converted that post into a page, to give it more permanence. On that version, I added the suggestion that the inland hire fleet probably accounted for the vast majority of the diesel on which Mineral Oil Tax was paid. Note that the owner of a hire fleet would make a single return covering the entire fleet.
Some folk objected to my mentioning this matter at all; others suggested that I was wrong and that most boat-owners were undoubtedly law-abiding taxpayers. Accordingly, I asked the Revenue for the number of returns received in each of the two full years for which the scheme has operated. The response:
[…] the number of returns for 2009 (received in 2010) was 38 and for 2010 (received, near end of 2010 or in 2011), the figures was 41.
Most boat-owners have been dodging the tax. I rest my case.
Are you aware that you can currently pay the full price at the fuel pumps on the river, I bought deisel on 2 occasions last year and I was asked if I wanted the higher price i.e. with the duty, I paid the higher to save me having to fill in forms and be bothered with all that extra hassle, so I object strongly to your idea that no is paying the duty just because they didnt send in a return.
That is an interesting point. The question is whether the fuel you bought was marked gas oil. If it was, you are still required (as far as I can see) to make a return:
The requirement to make a return seems to be conditional on the use of marked gas oil, not on the price paid for it.
I presume that, if you paid the “full price”, you got auto diesel, and that it came from a separate pump and tank. The system does not seem to provide for a seller to charge full price for marked gas oil and to make a return of the difference, but if you can point me to relevant Revenue documents I would be grateful. bjg
I have checked with the Revenue and, if I have understood their response properly, buying marked gas oil but paying the auto diesel price would fall outside the procedures allowed for payment of the Mineral Oil Tax. Buying auto diesel (and paying the auto diesel price) would of course be OK. I am keen to find some source of reliable statistics on purchases of auto diesel for private pleasure craft. bjg
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