A USED car importer has challenged the vehicle registration tax valuation system as secretive, arbitrary and lacking in transparency.
In High Court proceedings, Used Car Importers of Ireland (UCII), Centre Park Road, Cork, claims VRT discriminates in favour of the domestic car trade and against importers by allegedly imposing artificially high values on imported used cars.
VRT was introduced in 1993 and UCII brought its proceedings in 1995. Following several years seeking disclosure of documents needed for the case, it began yesterday before Mr Justice Roderick Murphy and is scheduled to run for three weeks. UCII has been involved since 1998 in the importation and sale of used vehicles, particularly from Japan, but also from other EU states.
In its action against the Minister for Finance, the Revenue Commissioners and the State, UCII wants an injunction requiring publication of values of new and used cars for the purpose of calculating VRT.
It is also seeking declarations including that the manner in which the Revenue assesses VRT on imported vehicles is contrary to section 133 of the 1992 Finance Act, unconstitutional and contrary to the Treaty of Rome. The company is also seeking damages.
UCII claims the 1992 Finance Act, which introduced VRT, provides the value of new vehicles for VRT purposes is the open market selling price. For second-hand cars, the value is the open market price inclusive of all taxes and duties which, in the opinion of the Revenue, might reasonably expect to be achieved in a retail sale.
UCII claims the Revenue has established a computer-based system for valuing second-hand imported cars in this way. It complains that system does not take account of the actual sale price but instead imposes a value for VRT purposes obtained from this computer system.
Neither this “secretive” system nor the tables of values of second-hand vehicles are published and the defendants have refused to divulge them to UCII, it is claimed.
As a result, when buying and selling stock, it is impossible for UCII to calculate eventual VRT liability, it claims. This, it says, places a severe burden on the company in negotiating individual sales and has seriously hindered its capacity to manage and plan its business.
UCII claims that since the introduction of VRT, the overall trade has been in progressive decline and it continues to suffer loss and damage. It has also been subject to arbitrary increases out of line with actual market price, UCII says.
Paul Sreenan SC, for UCII, said the system effectively distorted price competition and was designed to make it more attractive for people to buy new cars rather than second-hand ones.
Mr Sreenan argued that the legislation itself was discriminatory and also contended the way it had been operated by the Revenue since 1993 was unlawful.
The defendants say there is a programme for recording data relevant to the valuation of vehicles. They say there are no tables of values of second-hand vehicles and they are not obliged by law to publish any values having regard to the “myriad of factors” influencing retail values.
If UCII has suffered any loss or damage, it is caused by other factors, the defendants plead.