Brendan Howlin
Question:45 Mr. Howlin asked the Minister for Finance the changes in vehicle registration tax introduced in the budget; and if he will make a statement on the matter. [28038/98]
Written Answers - Vehicle Registration Tax.
The current two band structure of vehicle registration tax is being restructured to a three band system, in respect of category A cars, with effect from midnight 31 December 1998 and the rates of VRT for certain bands are being increased.
The revised bands and the rates applicable to them are as follows:
|
Engine Capacity |
Rates |
|
0 — 1,400 ccs |
22.5% (no change) |
|
1,401 — 2,000 ccs |
25% (increase from 22.5%) |
|
2,001+ ccs |
30% (increase from 22.5% for cars up to 2,500 ccs and increase from 28% for cars 2,501 ccs and over) |
I believe that the overall package of measures announced in my budget, particularly in relation to income tax and corporation tax will help to stimulate growth in employment in all sectors, including that of the motor industry, which has been experiencing considerable growth in car sales.
I would like to inform the Deputy that the VRT figures for 1998 to date show that 57 per cent of new car sales are in the up to 1,400 cc bracket. These sales are not affected by the budget announcement. A further 39 per cent of new car sales are in the 1,401 to 2,000 cc bracket. These face a price rise of 3.3 per cent. Only 4 per cent are in the 2,001 cc + bracket which face a price rise up to 10.7 per cent. Most manufacturers have models below 1,600 ccs, exceptions being manufacturers of luxury and sports car marques.
I have been informed by the Revenue Commissioners, who have responsibility for the administration of the vehicle registration tax, that the average increase in VRT in respect of 1,600 cc motor cars is in the region of £468 which, given the lower rates of interest for borrowers, could not be deemed excessive in the context of the overall price of a new motor car.