I have indicated that I am considering revising the motor taxation regime for cars to align it more closely with CO2 emissions from the vehicle rather than engine size. Work on this proposal is continuing in my Department.
Vehicle Registration Tax, which falls under the remit of my colleague, the Minister for Finance, is also levied on the basis of car engine size. While the VRT regime already favours vehicles with lower carbon dioxide emissions through a 50% relief for hybrid electric cars and flexible fuel vehicles, my Department is working with the Department of Finance and the Department of Transport on the feasibility of levying VRT on the basis of CO2 emissions. Decisions in relation to any proposal to revise VRT and other transport-related taxes would have to be finalised in a budgetary context.