Thousands of motorists who enjoy free workplace car-parking are to be taxed on the perk under a new plan being drawn up by the Government.
A committee established by the Minister for Finance is finalising proposals for the introduction of a benefit-in-kind (BIK) on employee parking. The Minister is to announce details of the new tax in the December Budget.
It is expected the tax will apply to the estimated 26,000 motorists who have free office parking in Dublin city centre. However, motorists in other large urban centres such as Cork, Limerick and Galway may also be hit.
With the average annual rental of a car-park space in Dublin at £2,000, the cost of a BIK to the 44 per cent taxpayer would be £880 a year. This would represent an approximate yield to the exchequer of £22 million a year.
The Government will meet huge resistance to the tax from motorists, who are already paying high petrol and road taxes. There is also opposition from civil servants, many of whom have free parking.
In Dublin alone the Revenue Commissioners has 782 parking spaces, more than twice that of other Government Departments. Between them, Government Departments have 3,376 parking spaces for staff in Dublin.
A Department source said the Minister was determined to have car-parking BIK measures included in the forthcoming Budget.
Dublin Corporation's director of traffic and assistant city manager, Mr Owen Keegan, said there would be advantages in announcing the details of the scheme this year providing for a sliding scale of a period of two to three years for implementation to give commuters time to change their travel arrangements. This would also allow time to improve the bus and suburban rail systems, he added.