Wednesday, 10 February 2021

Questions (120)

Bríd Smith


120. Deputy Bríd Smith asked the Minister for Transport his plans to lower the cost of road tax in 2021 given the reduction in car and road usage during the Covid-19 pandemic as a result of restrictions on unnecessary travel to work and leisure and intercounty travel; if his attention has been drawn to the refunds made by motor insurance companies to reflect this; if he will make similar road tax adjustments; and if he will make a statement on the matter. [6504/21]

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Written answers (Question to Transport)

Motor tax is payable if a vehicle is being used in a public place.

I understand that refunds of a proportion of motor insurance paid last year were given on the basis of reduced risk due to a reduction in the number of vehicles on the road given the restrictions put in place due to Covid. Motor tax is not linked to the level of use on the road, rather it accrues to the Exchequer as an excise duty. Motor tax receipts are a significant contributor to Exchequer finances and form part of the means in ensuring that Covid-19 supports can continue in the short-term, in helping the re-building of the economy in the medium term, and in ensuring the ongoing provision of public services. In this regard, the Deputy will be aware that the Government has, over the course of the last year, channelled significant Exchequer resources towards an extensive range of supports for Covid-impacted businesses including rates waivers, re-start grants, lending facilities, equity injection, business advisory supports, and supports for sectors particularly affected by Covid, such as the recent introduction of the Tourism Business Continuity Scheme. In terms of social protections, supports include the Pandemic Unemployment Payment and the Employment Wage Subsidy Schemes.

Changes to the rates and banding structures for motor tax take place in a Budgetary context. You may be aware that changes to some rates and to the banding structure for new cars were announced in Budget 2021 and recently legislated for in the Finance Act 2020. There are no plans to amend motor tax legislation further at the present time.