Dáil Éireann díospóireacht -
Thursday, 25 Feb 1999

Vol. 501 No. 2

Written Answers. - Vehicle Registration Tax.

Jimmy Deenihan

Ceist:

14 Mr. Deenihan asked the Minister for Finance if he will allow for a refund of the percentage of vehicle registration tax related to the value of a vehicle at the time of export in order to encourage the export of second hand cars; and if he will make a statement on the matter. [5378/99]

John Perry

Ceist:

37 Mr. Perry asked the Minister for Finance if his attention has been drawn to the fact that car owners and garages are deprived of the benefits of the European Single Market by not being in a position to sell used cars to other EU countries due to the residual element of the high level of vehicle registration tax imposed on cars; and the steps, if any, he will take to ensure that car owners and garages have access to used car markets in other EU countries. [4130/99]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 14 and 37 together.

This issue has been raised in the House on a number of previous occasions. I do not accept that the residual element of vehicle registration tax, VRT, is depriving car owners and garages of the benefits of the Single Market; nor do I sub scribe to the view that the residual element of VRT is the sole reason why Irish used cars are not sold in other European countries. For obvious reasons, the principal outlet for such vehicles would be the UK where I believe there may be a number of factors which affect the export from this country of such second hand cars.

These may include the relative range and choice of second hand cars in the Statevis-à-vis those available in the United Kingdom, where there is a higher ratio of car ownership as well as higher car fleet ownership. The fact that the UK has had for many years an “MOT test” may also mitigate against imports into that country from the State. This position may alter following the introduction here of car testing from the beginning of the year 2000, which was recently announced by my colleague, the Minister for the Environment and Local Government.

VRT is paid on a once-off basis at the time of registration of a vehicle; there is no legal provision of repaying a proportion of this tax when a used car is removed from the State; nor is it incumbent on the authorities here to do so in the Single Market. This tax is a valuable source of Exchequer funding which yielded £486 million in 1998. It would not be appropriate for me to introduce a facility which would subsidise the export of used cars from the State, if this is what the Deputies have in mind. There may also be EU Treaty implications of any such export refund scheme.