CAR PARKING LEVY:MOTORISTS WHO drive to work in the cities are being encouraged to swap steering wheel for saddle with a new €200 annual levy charged to employees whose employer provides them with a parking space.
It coincides with a new benefit-in-kind exemption of up to €1,000 for employees who cycle to work.
The new car park levy applies to the employee rather than the parking space, so those sharing spaces will each have to pay the €200 fee.
A spokesman for the Department of Finance said the new levy would apply to civil servants and members of the Oireachtas, as well as to ordinary citizens. The urban areas involved will be the centres of Dublin, Cork, Galway and Limerick.
To encourage cycling, the provision of bicycles and associated safety equipment by employers to employees who agree to use the bicycles to cycle to work will be treated as a tax exempt benefit-in-kind.
The exemption will only apply once in any five-year period in respect of any employee. There will be a limit on the value of such purchases of €1,000 for each employee. The exemption begins on January 1st, 2009.
The new moves come as motorists suffered further financial pain with an 8 cent rise in excise on a litre of petrol from midnight last night.
The 0.5 per cent rise in VAT to 21.5 per cent from December 1st will further push up the prices. There was no rise in the duty on diesel, while the Minister made no reference to changes to the price of biofuels. The VAT rise will also push up new car prices and servicing costs.
Motor tax is also set to rise. The cost for cars registered before January 1st last year will rise by 4 per cent for cars with engines under 2.5 litres and 5 per cent for cars with engines larger than that.
For cars registered since January 1st, the emissions-based motor tax will rise by 4 per cent for cars with emissions up to 170 g/km - bands A to D - and 5 per cent on cars with emissions over that - bands E to G. The increases come into effect at the start of next year.
Minister for Finance Brian Lenihan also announced a change in the benefit-in-kind system.
Currently charged at 30 per cent of the value of the car - with reductions depending on annual mileage - the new system will tie the charge to the cars' level of CO2 emissions.
The details will be published in the Finance Bill in the coming months.