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Tax Code

Dáil Éireann Debate, Wednesday - 30 March 2022

Wednesday, 30 March 2022

Questions (17)

Brendan Griffin

Question:

17. Deputy Brendan Griffin asked the Minister for Transport if he will re-examine an issue regarding motor tax (details supplied); and if he will make a statement on the matter. [16810/22]

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Written answers

Motor tax for private vehicles is based on either engine capacity or, for vehicles registered since 2008, carbon dioxide (CO2) emissions. In both cases, motor tax rates are based on a graduated banding structure. For engine capacity, vehicles with bigger engines attract a higher rate of motor tax. Where motor tax is based on CO2, which is 83% of the private vehicle fleet, vehicles with higher emissions attract a higher rate of motor tax than those with lower emissions. Any changes to the motor tax structure would need to be considered in the overall budgetary and policy context.

Motor tax can be paid on an annual, half-yearly or quarterly basis. The rate applicable to the half-yearly option is 55.5% of the annual rate, and 28.25% of the annual rate for the quarterly option. These ratios have remained generally consistent since the 1960s. The loss of income that would arise from changing these arrangements would have a negative impact on motor tax revenue and would have to be borne elsewhere in the motor tax system or in the taxation system generally. The loss to the Exchequer that would arise from the elimination of the additional charge for these options has been estimated at just over €37m, based on the volume of transactions in 2021. Given the sum involved, any proposed change is a matter for consideration in the context of Budget preparations.

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