THE GOVERNMENT will take in €1.1 billion on Vehicle Registration Tax this year, down 20 per cent on the €1.3 billion in 2007, according to estimates from the motor industry. Revenue from motor tax, however, is likely to increase slightly, as the road tax rates increased by 9.5 per cent for cars registered before July 1st.
This is likely to give the Government an additional €100 million, according to estimates from the Society of the Irish Motor Industry (SIMI). Motor tax revenue in 2007 was more than €956 million – a 9.6 per cent increase on 2006. It has also been reported that the Government’s calculations on Ireland’s greenhouse gas emissions levels have been greatly underestimated, and Environment minister John Gormley has said that different departments must find ways of reducing emissions in the areas of transport and agriculture.
Despite this, the SIMI has called for there to be no change in the current VRT rates and bands in the upcoming budget.
“The Irish consumer has responded to the new VRT system by purchasing cleaner cars and this can be seen by the drop in our CO2 figures for new cars.What we need now is a period of stability to encourage the continued purchase of these newer, cleaner cars,” said SIMI director general Alan Nolan.
SIMI is also calling for the introduction of a new scrappage scheme to stimulate car sales. It proposes targeting vehicles in the low emissions VRT categories A, B and C, with €1,000 incentive. It claims that the purchase of each additional 1,000 cars under the scrappage scheme would raise increased VRT and VAT revenue of €8.8 million, and the removal of each 1,000 old cars under the scheme would save 700 tonnes of CO2. The submission also calls for proper enforcement of laws surrounding non-payment of VRT on imported cars from the UK and elsewhere.