I have no plans currently to change the available options for paying motor tax incrementally (quarterly or half-yearly) or to introduce a direct debit payment option for motor tax. The current quarterly and half-yearly payment options incorporate a surcharge element to cover the higher administrative costs involved in processing such applications. The estimated annual income from the increased charges for half-year and quarterly vehicle licences is in the region of €20m. Were a monthly pro-rata system to be introduced, the loss in income would have to be compensated for elsewhere in the motor tax system, or through the taxation system generally. It would also have a negative transitional impact on the flow of income to the Local Government Fund and consequently on grant allocations to local authorities from the Fund.
Further, it is unlikely that the introduction of a direct debit payment option would lead to a reduction in administration. An applicant would still need to apply for motor tax, a disc would still need to issue, renewal notices and reminders would still need to issue when tax renewal falls due. There would be significant once-off costs in setting up such a system, as well as ongoing administrative, control and financial costs. Any such proposal would require legislation to ensure that there is a system in place to recoup income lost to the taxpayer where there are insufficient funds in personal accounts to meet the payment or where the direct debit option is cancelled by the account holder once a disc is issued.