VRT Megathread - ALL VRT DISCUSSION IN HERE - Read First Post

The following figures represent an alternative answer to VRT. They are based on approximations and are very conservative estimates. I believe that further research will show an estimated €500 million in revenue per year, which will be more stable and reliable than VRT, and more resistant to economic changes. It will also contribute safer, more affordable, more fuel efficient and greener motoring in Ireland

1) A VRT amnesty offered for all foreign registered vehicles to allow owners to legally import their vehicles, with a handling fee for registration similar to that of commercial vehicles, followed by payment of Irish Road Tax on these vehicles. There should be a requirement to prove that a vehicle has been in the owner’s possession for a period of time prior to the announcement of the amnesty to prevent vehicles being purchased abroad en-masse. As there is a quarterly payment available for payment of road tax, this should allow affordable transfer of vehicles for all. Heavier penalties for non-payment of Road Tax for those who have registered their vehicles, but not paid Irish road tax should also be implemented, enforced by An Garda Siochana.

2) After a period of 6 months, the removal of Vehicle Registration Tax, which should be replaced with a flat rate €100 Vehicle Registration Fee. This should be extended to all new registrations including previously exempt vehicles.

3) Tax of 20 cent on each ticket sold imposed on all public, local authority and private pay and display car parks. 10% fine imposed on all fines issued for non-compliance with parking bye-laws, and clamping/tow-away release charges. This should not be extended to residential parking schemes.

4) End of any Scrappage Scheme on new car sales, replaced with a rebate for used car sales to used car dealers on models first registered after 1st January 2008.

5) Regulation of motor tax amounts. CC based calculations should remain as they are for vehicles registered pre-January 2008, as an incentive for buying a newer model.

6) Increase of 4 cent per litre on Petrol and 2 cent per litre on Diesel

NOTES AND RATIONALE

1. Assuming 50000 vehicles are registered, paying on average €500 in road tax, plus €100 as a one-off registration fee, this would generate approximately €130,000,000 over the next 5 years in Road Tax. These vehicles are already on the road however road tax is currently being paid to a foreign government, mainly the UK. There would also be significant cost savings from less requirement of enforcement by Customs & Excise.
2. Removal of VRT should see a huge increase in new vehicle sales, restored to near 2008 levels. Also, those previously considering a 2007/2008 model should now see themselves in a position to purchase a brand new car. Assuming 100,000 new vehicles are registered, this should see VAT receipts increase by approximately €175,000,000 to €340,000,000, and adding the registration fee this will add a further €14,800,000. It would also have the effect of modernising the fleet of vehicles currently on the road in Ireland, thus being more fuel efficient, and creating less CO2
3. Figures not yet available, although assuming 100,000 pay and display spaces exist, and excluding added revenue from enforcement of non-compliance, this would generate approximately €8,000,000 per year. See calculation attached. I believe the number of spaces available for pay and display to be a lot higher than 100,000. This will effectively act as a localise congestion charge also, and hopefully discourage non-essential use of cars in built up areas..
4. With the removal of VRT, all vehicles will automatically depreciate, and the only casualty in this would be used car dealers. As this industry is already in difficulty, it would be necessary to allow dealers time to wind down stocks, and allow a rebate on sales of cars taxable under newer CO2 based Road tax prices. It should have less of an impact on those who currently own a vehicle, as the depreciation will be across the board, and newer models will also depreciate, making their next purchase much more affordable. The rebate would be based upon a % rate of VRT already paid on the vehicle purchased, on models later than January 2008, to lessen the impact of depreciation on any remaining stock used vehicles.
5. By leaving CC rates or road tax in place, this will a much greater incentive for those changing their car to buy a 2008 model or newer, as they will avail of cheaper road tax in most cases, and again helping to modernise the types of cars driven on Irish roads – safer, more fuel efficient transport.
6. This measure would be required to slowly bring Ireland closer in line with EU objectives, by basing tax collected on usage, rather than engine emissions. A simple example is that a driver may own a 1.0 litre Renault Clio, and will fall into the cheaper tax bracket as it stands, whereas the owner of BMW X5 will fall into the higher bracket. If the BMW driver only does 5000 miles per year, and the Clio driver does 40000 miles per year, the Clio driver is obviously creating much higher CO2. This would regulate this part of the road tax, and should eventually lead to a usage-only based road tax. The initial rise would increase tax claimed by the exchequer by approximately €150,000,000. per year

ryanstewart wrote: »

Bear in mind the 1 billion euro figures for 07/08 we're part of the problem that's landed the country in this mess. It was all credit fuelled, and the likelihood is that these figures will never be attained again.

Ireland facing EC proceedings over VRT charges
Sunday, June 14, 2009 - By Kieron Wood
The European Commission has begun proceedings against Ireland for infringing EU law by charging vehicle registration tax (VRT)o n vehicles imported from other EU member states.

The Revenue Commissioners charge VRT based on a notional ‘‘open market selling price’’ of imported vehicles, rather than the actual purchase price.

The open market price would typically be higher than the purchase price, resulting in higher VRT for the purchaser. VRT is charged at rates of up to 36 per cent, depending on a vehicle’s emissions.

Second-hand car dealers have long been critical of the method of calculating the VRT rate. In 1998, Niall O’Dowling of Used Car Importers of Ireland (UCII) brought High Court proceedings against the ‘‘secretive and arbitrary’’ way the tax was imposed. He claimed there was unfair discrimination in favour of the importers of new vehicles.

O’Dowling said that the distributors of new vehicles decided their open market selling prices, on which VRT was based. But the Revenue Commissioners calculated the open market price on second-hand vehicles, based on 25 unpublished ‘‘depreciation scales’’.

The Revenue claimed the open market price was the price a car might reasonably be expected to sell for on the retail market, and said it administered the VRT system ‘‘objectively and impartially’’. In 2005, it was ordered to provide all the relevant documents to UCII. At a hearing in 2006,Miss Justice Mary Laffoy said: ‘‘Unfortunately, the enthusiasm for a speedy resolution of the matter, which obviously inspired that order, seems to have dissipated.”


O’Dowling said last week: ‘‘We received a letter of confirmation from the EU Commission last week. The proceedings go back to a complaint registered in 1999. I would expect that the investigations are now at an advanced stage, given the time span involved.”

A spokeswoman for the Directorate General for Taxation and Customs Union in the European Commission confirmed that the Commission had opened proceedings, but added: ‘‘No public information is available at the moment.”

Total net receipts for VRT rose from €820 million in 2003 to a high of €1.4 billion in 2007. This year, VRT receipts have collapsed, with provisional figures of €240 million for the five months to May 31 - equivalent to an annual drop of almost 60 per cent.