Vol. 416 No. 6
65 Mr. Farrelly asked the Minister for Finance if he will outline, (1) the total estimated income from the increase in car tax introduced by him in the budget for 1992 and (2) the amount which will be realised in a full year; and if he will make a statement on the matter.
The increases in road tax announced in my budget speech will take effect from 1 April 1992 and will yield £27.5 million in 1992 and £36.7 million in a full year. The additional revenue from these increases is being used to help fund a number of initiatives in relation to the motor trade including a reduction of the tax on petrol by about 9p per gallon from 1 May 1992, a reduction of the initial excise duty on cars up to 2012 cc from 21.7 per cent to 20 per cent and the abolition of the initial 6.5 per cent excise duty on certain commercial vehicles. Quite apart from the beneficial effects for the motor trade and the savings for purchasers of new private cars and commercial vehicles, it has been calculated that for most motorists doing average annual mileage, the savings on petrol costs will cover the increased road tax payable.
