Dáil Éireann Debate, Tuesday - 4 July 2006
285 Ms Harkin asked the Minister for Finance his views on whether the imposition of vehicle registration tax is an anti-competitive practice, which runs counter to free trade and the Treaty of Rome; and if he will make a statement on the matter. [26144/06]
View answerWithin the EU Single Market, the facility is available for Member States to raise revenue through internal taxation subject to certain provisos such as: that the measures do not give rise to border controls; that there is no discrimination as between home produced goods and those imported from other Member States; and that the measures are not of the nature of quantitative restriction on imports or exports.
VRT has been examined by the European Court of Justice and has been found to be compatible with EU legislation. Motor vehicle taxes have been a traditional source of revenue in Ireland for decades and provide significant revenue to the Exchequer which is used to fund vital public services. Quite simply, the mix of taxes, their levels and rates are a matter for EU Member States based on legitimate choices. As regards the balance of taxation, Ireland has prioritised tax reductions on income earned by employees, in preference to other tax areas, and this policy has helped create record employment levels.
286 Ms Harkin asked the Minister for Finance his views on making refunds of vehicle registration tax where a vehicle is being exported second-hand from Ireland after VRT has already been paid here; if not, his further views on whether this represents a real interference in trade outside the national territory of Ireland; and if he will make a statement on the matter. [26145/06]
View answerI have no plans at present to introduce a VRT export refund scheme. I don't accept that the introduction of such a scheme is necessary under EU law, and any such scheme has the capacity to simply act as a State subsidy for car dealers. Given the profitable nature of the motor trade, introducing such a refund scheme would seem inappropriate given that the money involved can be better spent elsewhere.
