FUTURE owners of the motoring behemoths - American-style pick-up trucks - are likely to feel the pinch of today's budget if the Minister for Finance removes them from the commercial vehicle category for Vehicle Registration Tax (VRT). Michael McAleer reports
In the last budget, Mr McCreevy reclassified the tax on these vehicles to just €50. This reduced prices by up to €9,000, making them very attractive not only to commercial users such as builders and farmers, but also to more sedentary workers in the cities and towns.
Sales of these double-cab pick-ups, such as those sold by Mazda, Nissan, Toyota and Mitsubishi trebled in the first half of this year. Mitubishi alone saw an increase in sales of its L200 pick-up from 200 in 2001 to 1,200 to date this year.
Industry sources reckon the Minister may create a new category of about €1,000 to the VRT rate for pick-ups and small vans. However, he may also grant several months grace before the increase is introduced.
Most predict that petrol will fall foul of the Minister's need to increase the Government's coffers. However, there are other areas where motorists may also be affected.
Not surprising considering the motor industry provides the Government with over €4.4 billion taxation revenue each year, according to the industry lobby group, the Society of the Irish Motor Industry (SIMI).
It has called for VRT rates be cut by 2.5 per cent points to stimulate the marketplace. However, many believe Mr McCreevy may increase VRT.
ACCORDING to Eddie Murphy of Ford Ireland: "A momentum is being generated on tax harmonisation at European level and our Government will not be able to ignore the matter indefinitely.
"An uneven playing field in car taxation deprives both the motorist and the industry here of the benefits of the Single Market.
"Minister McCreevy's focus at the moment needs to be on curbing spending, rather than raising indirect taxes."
The Minister may also introduce benefit in kind taxation on company car parking and change the assessment system for benefit-in-kind on company cars to one based on CO2 emissions, as in Britain.
There have been calls on the Minister to abolish or redirect the two per cent stamp duty on motor insurance.
According to Michael Kemp, chief executive of the Irish Insurance Federation (IIF), the Motor Insurance Advisory Board (MIAB) recommended abolition of the stamp duty in relation to motor insurance in its report.
IIF spokesperson Martin Long says that Department of Finance figures show the Government collected €69.1m from duty on non-life premiums (motor, property and liability insurance) in 2001. "As income from motor insurance is worth about 50 per cent of total non-life premium market, we estimate yield from motor premiums alone approached €35-€40m last year."