GOVERNMENT TAX revenue on the sale of new cars fell again in January, despite the number of cars sold rising by 5 per cent. The monthly income from Vehicle Registration Tax (VRT) was €63.4 million, down 8.3 per cent on last year and 80.7 per cent on the tax generated from new car sales in January 2008, which was €328.6 million that month.
In July 2008 the VRT system was changed from a 23-band tax on new cars based on engine size to the current seven-band scheme determined by emissions.
The drop in VRT tax income from new car sales is in line with a shift towards lower emission models and diesels since the new tax regime was introduced. Cars with emissions below 141 g/km – qualifying for annual road tax of either €104 or €156 – made up 70.8 per cent of all new car sales in January, which totalled 16,595.
According to Revenue officials, only 90 applications for scrappage were processed by the Department of Finance last month, with a total payout under the scheme of €129,236.
The scheme entitles the owners of cars 10 years of age or older up to €1,500 if they scrap their cars. Announced in December’s Budget, it has been suggested that it could add up to 10,000 new car sales to the overall market this year.
However, most manufacturers contacted yesterday said that this was down to delays in filing and processing paperwork and applications.
A spokeswoman for Hyundai Ireland said its dealers had recorded 113 new car sales in January under the scrappage scheme, but while the dealers had passed on the scrappage discount, they had not always filed the paperwork applying for the scrappage rebate on their VRT payment.
Ford Ireland’s chairman Eddie Murphy estimated that of 1,066 Fiestas sold last month, between 120 and 150 sales were part of the scrappage scheme.
After years of dominance by the Ford Focus and Toyota Corolla, the Irish market is now being led by a supermini, with the Ford Fiesta becoming the best selling model in January’s market.
According to data from motorcheck.ie, the used car background checking website, diesel cars made up 58.9 per cent of the new car sales, while silver, black and grey remain the favoured colours for new cars, representing 66.5 per cent of all sales.