Dáil Éireann Debate, Thursday - 29 February 2024
162. Deputy John Brady asked the Minister for Transport the reason motorists are being charged a premium for paying their motor tax in quarterly or half-yearly instalments; if this is a matter his Department could review; and if he will make a statement on the matter. [9768/24]
View answerThere are no plans currently to amend or review motor tax legislation to provide for pro-rata rates for half-yearly and quarterly motor tax. Any such change would be a Budgetary matter for the Minister for Finance.
The rates applicable to the half-yearly and quarterly options as set out in law are 55.5% and 28.25% of the annual charge, respectively. This means those who opt to pay motor tax twice a year pay an additional 10% per year and those who pay four times per year pay an additional 13% per year. The surcharges for the quarterly and half yearly payments for motor tax have remained generally consistent since the 1960's.
It is not unusual to pay more when paying more frequently. Each half-yearly or quarterly renewal of motor tax requires the same administrative procedures as the annual renewal process. Accordingly, aside from the loss in receipts, any consideration of re-balancing of the charges for non-annual discs must take account of the fact that overheads, both direct and indirect, would also increase significantly. If the surcharge were abolished many more people would opt to pay quarterly, which could more than double the number of transactions and the number of motor tax discs required.
The loss of income that would arise from changing these arrangements would have a negative impact on the total collected via motor tax and would have to be borne elsewhere in the tax system. The loss to the Exchequer has been estimated at some €35.3m, based on the pattern of transactions in 2022.
