ABSTRACT
This chapter is concerned with non-transport fuels, meaning that jet fuel, petroleum and diesel oil are largely ignored. The most striking feature about the fiscal treatment is the reduced rate of Value Added Tax (VAT) applied to heating fuel and light, at 12.5 per cent, a "reduced rate" which is allowed in the harmonised EU VAT rules. VAT rates on fuel tend to be higher elsewhere than in Ireland. The lesson from the UK is that the regressive effect of increased fuel taxes on low-income homes needs to be demonstrably avoidable, by means of raised social welfare payments. The best manner to overcome the income distributional effects of higher energy taxes needs to be addressed, in order to promote the taxes' acceptability. In the case of rented accommodation, regulation is required, or guidelines should be produced for negotiations between the tenant and owner to install energy saving items.
