Dáil Éireann Debate, Tuesday - 22 May 2018
131. Deputy Michael McGrath asked the Minister for Finance the rationale for bringing in changes to the vehicle registration tax, VRT, regime under section 53 of the Finance Act 2017; the rationale for including certain N1 BE vehicles in the definition of category A vehicle including seven-seater double chassis cab tippers and van crew cabs; and if a review of this change can be made before its commencement date of 31 July 2018. [22005/18]
Amharc ar fhreagraI am informed by Revenue that section 130 of the Finance Act 1992, as amended by section 53 of the Finance Act 2017, provides that, from 31 July 2018, N1 vehicles with 4 or more seats and to which a BE bodywork code has not been assigned will be defined as VRT category A vehicles. N1 vehicles which have 4 or more seats and which have been assigned a BE bodywork code will continue to qualify for the category B rate. This will ensure that genuine commercial vehicles continue to benefit from the lower rate of 13.3% VRT.
The N1 category incorporates certain vehicles that, by design, facilitate use for non-commercial purposes (specifically those with 4 or more seats) and that were, over time, increasingly being bought and used for purposes that were clearly not commercial. The tax advantages attached to these vehicles spurred sales volumes, creating distortions to the market (incentivising the purchase of vehicles that typically emit high levels of CO2 over those with lower levels of CO2 emissions) and resulting in loss of revenues to the State. I am satisfied that the change in the legislation addresses this issue by providing for definitions of VRT categories A and B which accord with the design and functionality of both non-commercial and commercial vehicles.
