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Dáil Éireann debate -
Thursday, 5 Mar 1998

Vol. 488 No. 3

Ceisteanna—Questions. Priority Questions. - Motor Taxation.

Alan M. Dukes


1 Mr. Dukes asked the Minister for the Environment and Local Government if the proposals he announced on 12 January 1998 for significant reductions in tax on vehicles used for public transport will come into effect at the same time as the obligatory increases of 3 per cent in motor taxation which he has imposed on local authorities in 1998 and on 1 January 1999; the amount of the reductions; the effect, if any, they will have on general motor tax revenue; and if he will make a statement on the matter. [2468/98]

The reductions planned in motor taxation for public service vehicles, which are the first phase of a "greening" of motor taxation rates, will come into effect at the same time as the 3 per cent increase generally becomes operative in 1998 for other vehicle categories. There will be an across the board increase of 3 per cent for all tax categories on 1 January 1999. The precise amount of the reductions will be set out in the Bill to give effect to the changes which I intend to publish shortly.

Will the Minister indicate what is meant by public service vehicles? I assume it will cover buses. Will it cover buses in private fleets, taxis and hackney cabs? Will it apply to any other categories?

The Deputy is correct in his assumption. It will cover what are termed under the motor taxation code as large public service vehicles. These include public and private buses which carry persons for reward, other vehicles, such as minibuses owned by youth or community organisations or used exclusively for persons belonging to the organisations, and school buses. The regulations will also cover taxis and hackney cabs which are referred to as small public service vehicles.

Will it include buses owned by organisations such as the Irish Wheelchair Association?

Yes. It is intended that it will cover all minibuses and similar vehicles used by youth, community and voluntary organisations.

Will the Minister indicate the approximate size of the special reduction? Will it be at the same level thereafter or does he intend to review it with a view to increasing the tax advantage for public service vehicles if the system is working?

This is an initial step in "greening" the motor taxation rates. It will operate in 1998 and 1999. Following an assessment of its success, it is intended to further "green" the motor taxation system. The effectiveness of this approach will be taken into account, but further differentiation of taxes on heavy goods vehicles and more heavily polluting cars is being considered generally. The Deputy is aware of the EU proposal being considered by the transport directorate at present. This suggests tax differentiation in favour of less polluting heavy goods vehicles. Ireland supports moves in that direction. If measures arise from that examination, they will be implemented in Ireland.

Does the Minister intend to distinguish in the measure between petrol, diesel and LPG engines? Does he intend to examine any of the alternative technologies now available?

That will be part of our considerations in the long-term. Initially, the measure involves a straightforward reduction in certain categories, including public service vehicles. This will happen immediately but the Deputy's suggestion will be considered in the future as the taxation system is "greened" further.