Dáil Éireann debate -
Wednesday, 20 Feb 1991

Vol. 405 No. 4

Written Answers. - Taxes on Transport Services.

Ivan Yates

Question:

62 Mr. Yates asked the Minister for Finance if he will outline the current level of taxes by way of excise duties, VAT and any other taxes on transport services such as vehicles, parts and diesel fuel; the way in which they compare with similar taxes in the United Kingdom Northern Ireland, and the EC generally; and if he will outline his policy in relation to harmonisation of same in the single market of 1992-93.

Minister for Finance (Mr. A. Reynolds)

As the Deputy's concern appears to relate to commerical transport, the reply has been framed in that context:

Excise Duty
Ireland
Commercial vehicles	6.5 per cent of the chargeable value
Parts	Nil
UK/Northern Ireland
Commercial Vehicles	Nil
Parts	Nil

In the time available, it was not possible to obtain up-to-date figures on excise duties on vehicles for the other member states of the EC. However information on the levels of excise duty or corresponding taxes in the other member states as at 1 September 1987 is contained in the most recent edition of the Inventory of Taxes, published by the European Commission, a copy of which is available in the Oireachtas Library.

The various rates of excise duty charged on road diesel in member states are set out in Table 1 which is being circulated in the Official Report.

VAT

The rates of VAT applying throughout the Community on road diesel and on vehicles are set out in Table 2 which follows. The rates of VAT applying to spare parts cannot be readily identified.

Road Tax

The most readily available comparative road tax data relate to heavy goods vehicles with a laden weight of 38 tonnes. The Irish road tax for this category of truck will be increased to about £1,000 per annum — from £900 per annum — from 1 April 1991. According to EC Commission data, the average EC road tax for a 38 tonne truck is about IR £1,200 p.a. — ranging from about IR£300 p.a., in Spain to about IR£4,000 p.a., in the UK.

Further details are available in the above mentioned EC Inventory of Taxes.

EC Harmonisation Proposals

VAT: It is proposed that vehicles, spare parts and road diesel will be liable to VAT at the standard rate — a range of 14 per cent to 20 per cent has been put forward by the Commission.

Excise

To the extent that any excise duties on vehicles and spare-parts rely on the operation of border controls, the completion of the Single Market will require their abolition.

For road diesel, the Commission have recently proposed that the excise duty rate should be between 245 and 270 ECU per 1,000 litres — £18.93-£20.86 per hectolitre — from 1 January 1993.

Road Tax

The latest Commission proposal is that the road tax for a 38 tonne truck would initially be harmonised at minimum rates of between IR700 and IR2,150 — depending on axle configuration — over the period 1992-94. Road tax rates would then be further harmonised, on a phased basis, between 1995 and 1999, in order to cover road infrastructure costs generated by heavy goods vehicles, on the basis of road cost and usage data which the Commission envisage being submitted by EC member states.

The Deputy will be aware that the Government have taken a very positive attitude to the completion of the internal market, including the tax harmonisation dimension, but have also indicated that the budgetary problems which the various proposals pose must be recognised and addressed. We will be approaching the specific tax proposals in the transport area against that background, and with a view to ensuring that the overall effect of any adjustments which may be required do not undermine the competitive position of Irish road hauliers or exporters.

Following are the tables:

Table 1

Road Diesel: Excise Duty Rates as at January 1991

	IR£/hectolitre
Italy	28.13
Ireland	22.31
United Kingdom	20.90
Portugal	20.10
Spain	19.17
France	18.16
Denmark	17.31
Germany	16.77
Belgium	15.77
Netherlands	13.53
Luxembourg	7.88
Greece	5.72

Table 2

VAT on Motor Vehicles and Road Diesel in EC Member States

Member State	VAT Rates on Road Diesel	VAT Rates on Motor Vehicles
	%		%
Belgium	19	Commercials:	19
		Passenger Vehicles:
		Up to 3,000cc	25
		Over 3,000cc	33
Denmark	22	All	22
Germany	14	All(except invalid carriages 7%)	14
Greece	16	All	6
Spain	12	Commercials:	12
		Passenger vehicles:	33
France	18.6	Commercials:	18.6
		Passenger vehicles:	25
Ireland	23*	All	23*
Italy	19	Commercials:	19
		Passenger vehicles:
		Up to 2,000cc	19
		Over 2,000cc	38
Luxembourg	12	All	12
Netherlands	18.5	All	18.5
Portugal	17	All	17
UK	15	All	15

*21% from 1 March 1991.