asked the Minister for Finance the purpose of changing the system of valuation for the purposes of levying excise duty on motor vehicles which existed prior to 1 January 1985 (paragraph 19, S.I. No. 57 of 1979) i.e. the open market selling price, to a new system after 1 January 1985 i.e. the recommended retail price, (paragraph 6, S.I. 353 of 1984); the implications of this change for the State's revenue; the implications of this change for: (1) commercial importers and distributors of motor vehicles; and (2) private consumers who wished to purchase a motor vehicle in some part of the Common Market of the European Community other than the territory of the State and import such vehicle into the State; the provision he intends to make with regard to the regular publication of the statutory list of recommended retail prices of motor vehicles as required by paragraph 19.2 as amended of S.I. 57/79; if he will indicate by way of a worked example how excise duty is levied on a motor vehicle imported by the main distributor for vehicles of that type; and in the example, if he will show the various elements that make up the retail price.
Written Answers. - Motor Vehicle Excise Duty.
The change in the basis of charging excise duty on motor vehicles was introduced on the occasion of the removal of import restrictions on motor vehicles from 1 January 1985 by the repeal of the Motor Vehicles (Registration of Importers) Act, 1968. The main purpose of the change was to facilitate the collection of excise duty on second hand vehicles because the former basis of charge (i.e. the price to a dealer) was unsatisfactory for that purpose.
The change was designed to maintain the overall level of taxation on motor vehicles and, in general, the excise duty burden on vehicles was not altered. As far as commercial importers are concerned the new system of charge represents a simpler method of charging the duty and ensures equality of tax treatment as between imported vehicles and vehicles sold in the State. (Private consumers were not permitted to import vehicles prior to 1 January 1985.)
Lists of recommended retail sale prices of motor vehicles are furnished to the Revenue Commissioners by distributors but there is no requirement for the publication of those lists. The declared recommended retail sale price of any vehicle may be obtained by any member of the public by inquiry to the Office of the Revenue Commissioners. Price lists are also normally freely available from the larger motor dealers and are also regularly advertised by the trade.
The excise duty payable on a 1600cc motor car with a recommended retail sale price of £10,000, (which includes VAT) for example, is 21.7 per cent of the recommended retail sale price i.e. £2,170. VAT is chargeable at the rate of 25 per cent and accordingly the VAT payable would come to £2,000, (i.e. 25-125 of the retail price). The balance of £5,830 would represent the trade elements in the price, save where the car was imported from a non-EC country when customs duty might also be payable.