An unprecedented 70,000 used cars will be imported into the state this year, according to a submission to a Joint Oireachtas Committee by the Society of the Irish Motor Industry (SIMI).
This record number of used imports represents a 50 per cent rise over last year, which also rose by over 40 per cent on the previous year. The vast majority of these used cars are sourced from Britain where there is a larger supply of used cars, especially executive models with larger capacity engines.
However, there is growing concern that some importers are evading Vehicle Registration Tax (VRT) on these used cars. As a result, the motor industry is calling for a review of the Revenue's online VRT calculation system that provides used car importers with an estimate of their total VRT liability when they import a used car.
Irish car dealers are complaining that imported cars are often not being inspected to ensure they correspond to the specifications given to get the online VRT estimate. They say that because importers can get their cars valued online, they are not always declaring extras fitted to vehicles, such as multi-CD players, sunroofs and satellite navigation systems, which increase the value of the car and are therefore subject to VRT.
According to Cyril McHugh, SIMI chief executive, no one should be forced to pay VRT, but while Irish motorists are required to pay this tax, they should all be paying the same.
"I am pressing for the Revenue Commissioners to now make sure that their VRT assessments on used imports are correct and fair," he said.
While the Revenue Commissioners denies there is a problem with its system, it has warned that any false or misleading VRT declarations will be treated seriously and could lead to a fine of up to €12,695 and up to five years' imprisonment. In addition, the vehicle can be seized until outstanding VRT and penalties have been paid.
But a spokesman for the Commissioners said that the increase in the number of private imports is due to market forces and is not down to any miscalculation or evasion of VRT.
"We are satisfied that the control and examination arrangements currently in place are adequate and appropriate, and that they achieve a reasonable balance between the requirements of customer service and the prevention of VRT evasion," he said.
"All second-hand vehicles presented for registration are liable to inspection. However, in the interests of providing a fast and efficient service not all vehicles are physically examined." He added that the Commissioners work on a "presumption of honesty" when dealing with VRT declarations.
All imported used cars below two years of age and/or above a certain value are meant to be examined by a VRT inspector. In addition, lower value cars are also randomly inspected, although the Commissioners refused to divulge the percentage of used cars it examines each year "for operational reasons".