asked the Minister for Industry, Trade, Commerce and Tourism the implications for the Irish motor industry which the changes in EEC import rules will have on the industry from 1 January 1985, the system of taxation, tariffs or duty which will be imposed on motor vehicles from that date, and if he will make a statement on the entire motor industry in this country.
Ceisteanna—Questions. Oral Answers. - Motor Industry Future.
4.
In accordance with the provisions of Protocol 7 of our Treaty of Accession to the EEC the present arrangements for the protection of the motor vehicle assembly industry will expire on 1 January 1985.
The ending of restrictions on the importation of motor vehicles does not have any direct bearing on the level of taxation of motor vehicles which remains a matter for the Minister for Finance who recently announced details of the taxation system that will apply to motor vehicles from 1 January 1985. Excise duty will be charged on new and secondhand motor vehicles by reference to the retail price of the same or a similar model in the State while VAT will continue to be charged in general at 23 per cent of the full consideration for the purchase, including excise duty payable. I would refer the Deputy to the Minister for Finance's press statement of 26 September 1984 for further details.
The Minister is telling the House that the present arrangements for the protection of the motor vehicle assembly industry will expire on 1 January 1985. He also said it is not a function of the House to decide whether there should be tariffs or taxes on motor vehicles because that is a matter for the Minister for Finance. Does he agree that when we entered Europe an exemption for this industry was granted to Ireland? Is the Minister telling the House that it is Government policy to ensure that the high taxation that applies to the motor industry will continue after 1 January 1985? Is he now telling us that a new excise duty has been put on secondhand cars? Why is this happening? What effect does he see these moves having on the motor industry?
Any questions relating to fiscal matters should be addressed to the Minister for Finance. Upon our accession to the EEC the provisions of Protocol 7 of our Treaty of Accession were to protect the motor vehicle assembly industry. It was agreed that that protocol would expire on 1 January 1985. We are now moving into a different phase of full integration with the EC in relation to the motor assembly industry.
I accept the tariffs and taxes imposed on vehicles are a function of the Minister for Finance. However, as the Minister of State responsible for trade, will he tell us what effects these complementary tariffs will have on the motor industry? Will he not agree that the trading price of cars is far too high?
The price we pay for motor vehicles is governed by the level of taxation that is levied on vehicles and that is a matter for the Minister for Finance.
Will the Minister say what effect these changes will have on the Irish motor industry?
I do not see them having any effect other than a neutral one of maintaining the existing level of prices in the industry. That is a general remark but any other questions relating to fiscal matters should be addressed to the Minister for Finance.
The general public were under the impression that when the protocol changed on 1 January there would be a substantial reduction in car prices. Will the Minister say what effect it will have on the price of cars?
As I have said, I do not envisage any great change in the level of car prices. This has been explained to a large extent in the statement of the Minister for Finance to which I refer the Deputy.
What extra taxation will be obtained as a result of the new regulations?
I do not think it was intended that I should have to answer questions dealing with revenue.
The Minister said that excise duty and taxation will be maintained at the same level. Will he not agree that it is evident that because of that level of taxation and excise duty, trade in the motor industry has suffered considerably? It must be obvious to the Government that we have reached the stage of diminishing returns. Is the Minister satisfied with that state of affairs and the closure of garages which are caused principally because of the tax and excise duty on vehicles? Is he satisfied to allow that situation to continue?
I am aware that the motor industry here has suffered in recent years. I am not in a position to say if it is directly because of the level of vehicle prices because the recession must also be taken into account. I should like to see the motor vehicle industry more prosperous, but in relation to the taxation policy of the Government I again refer the Deputy to the Minister for Finance.