I move Financial Resolution No. 4:
(1) THAT as respects vehicle registration tax charged, levied and paid as on and from the 1st day of January, 1999, subsection (3) (inserted by the Finance (No. 2) Act, 1992 (No. 28 of 1992)) of section 132 of the Finance Act, 1992 (No. 9 of 1992), be amended by the substitution of the following paragraphs for paragraph (a):
"(a) in case the vehicle the subject of the registration or declaration concerned is a category A vehicle which has an engine of a cylinder capacity exceeding 2,000 cubic centimetres, at the rate of an amount equal to 30 per cent of the value of the vehicle or £250, whichever is the greater,
(aa) in case the vehicle the subject of the registration or declaration concerned is a category A vehicle which has an engine of a cylinder capacity exceeding 1,400 cubic centimetres, at the rate of an amount equal to 25 per cent of the value of the vehicle or £250, which is the greater,"
(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
Financial Resolution No. 3 provides for an excise duty reduction on auto liquid petroleum gas which, when VAT is included, amounts to approximately 1.8p on a litre with effect from midnight tonight. The decrease is expected to cost the Exchequer approximately £5,000 in 1998 and almost £100,000 in a full year. The effect on the CPI will be negligible.
The change is also expected to increase consumption of auto LPG by almost 2.5 per cent. Auto LPG is an environmentally friendly fuel. Reduction in the rate will encourage greater use of this cleaner product as a road fuel.
Financial Resolution No. 4 changes the structure of the vehicle registration tax for private cars in category A. It makes the following changes: the tax will now have three separate rates based on engine capacity which replaces the existing two rate system; the rate of tax on cars of less than 1,401 cylinder capacity remains the same at 22.5 per cent of the open market selling price, as determined by the Revenue Commissioners, and for all other cars, the new system means a rate increase.
This change will bring in significant extra revenue to the Exchequer but the change in rates is not intended solely as a revenue raising measure. Instead, these changes are a first response to the undoubted environmental impact of motoring in terms of air pollution, traffic congestion and fuel consumption.
The new structure will mean that for cars with an engine of a cylinder capacity of up to 1,4000cc, the rate of vehicle registration tax will be 22.5 per cent. This is the existing rate for these cars under the current system. For cars with an engine of a cylinder capacity of 1,401cc to 2,000cc, the rate of VRT will be 30 per cent. This represents an increase from the current rate of 22.5 per cent. For cars with an engine of a cylinder capacity of 2,001cc and over, the rate of VRT will be 30 per cent.
This means that for cars with an engine of a cylinder capacity exceeding 2,000cc, but not exceeding 2,5000 cc, the rate is increased from 22.5 per cent to 30 per cent and for cars with an engine of a cylinder capacity exceeding 2,500cc, the rate is increased from 28 per cent to 30 per cent. The new structure will come into operation with effect from midnight on 31 December 1998. The Exchequer yield from these changes is estimated at £43 million in a full year. It is estimated that these measures will increase the consumer price index by just under 0.1 per cent.