Dáil Éireann Debate, Tuesday - 9 April 2024
296. Deputy Michael Healy-Rae asked the Minister for Finance if he will consider reintroducing the VAT equalisation measure to stimulate car hire fleets and the possibility of pursuing a balanced approach to regulating the self-catering sector; and if he will make a statement on the matter. [14220/24]
Amharc ar fhreagraAs the Deputy may be aware, in Section 38 of Finance Act 2018 a partial repayment of Vehicle Registration Tax (VRT) was removed. It reflected the VRT charged on the VAT element of the vehicle. The relief was a legacy from 1993 when vehicle excise duty was being replaced by VRT, to ease the transition for car leasing and hire companies, by ensuring their costs didn’t increase under the new VRT regime.
By 2019 the original compensatory rationale for the scheme had passed and the application of the repayment scheme bore no relation to its original purpose. At the time of its removal the repayment cost the Exchequer over €20m a year.
In the interim there has been significant reform of the VRT regime. The environmental rationale has been strengthened significantly, with lower rates for low emission vehicles (7% for EVs and well-performing hybrids) and higher rates for high emission vehicles. If the sector is registering vehicles with average or below average emissions, the applicable VRT will be much lower than the rates in 2018.
However, I am aware of the car rental's sector on this issue and the matter will be examined as part of the normal budgetary process.
