Vol. 490 No. 5
166 Mr. O'Shea asked the Minister for Finance his views on whether it is fair that young drivers who, in general, are buying less valuable cars and paying a high level of car insurance are, in addition, subject to a high level of Government levy as compared to more mature drivers; the proposals, if any, he has to rectify the apparent inequity regarding the levy; and if he will make a statement on the matter. [10581/98]
A levy of 1 per cent was imposed on certain insurance premiums in 1982. This levy was increased to 2 per cent in 1993. The levy is imposed on almost all non-life insurance premiums, the exceptions being reinsurance, voluntary health insurance, marine, aviation and transit insurance and export credit insurance. The levy was introduced to broaden the stamp duty base, thereby raising additional revenue. The yield from this levy in 1997 was £30.5 million. Similar levies exist in most other EU countries and, in general, at rates higher than 2 per cent.
The amount of the levy payable is directly related to the amount of the insurance premium i.e. 2 per cent of the premium. The question regarding the level of car insurance premia paid by young drivers is a matter for the Minister for Enterprise, Trade and Employment.
