Moves to remove VRT

leahcim

From Newstalk website.

22/06/2006 07:29:40

Motorists will be more than a little happy to hear that moves are afoot at the European Parliament to do away with Vehicle Registration Tax. VRT adds a considerable amount to the price of a car here, with many arguing that it flies in the face of the spirit of free trade within the EU and is anti-competitive. If approved, a common car tax mechanism would be put in place across all members states based the on the usage rather than the acquisition of a car.

maidhc

Common fiscal policy is a seriously hot potato in the EU, and particularly in Ireland in the context of our low corporation tax that France and Germany would like us to get rid of. I would certainly rather us keeping VRT and control over our taxation system rather than importing the insane Joe Higgins style taxes they have on the continent. Now that the inflexibility of the european exchange rate mechanism is being blamed for our house prices, I simply can never see an Irish goverment agreeing to handing more control of he economy to Brussels.

There won't be a free market in cars across the EU until we all drive at the same side of the road at least. It is silly to suggest otherwise.

Henry Ford III

VRT, like it or loath it (as I do) contributes enormous money to the exchequer annually.

When (not if) it's abolished, another tax will be intoduced to recoup the loss.

€3 per litre of 95 unleaded anyone?

mikedragon32

Henry Ford III wrote:

VRT, like it or loath it (as I do) contributes enormous money to the exchequer annually.

When (not if) it's abolished, another tax will be intoduced to recoup the loss.

€3 per litre of 95 unleaded anyone?

If the rate of increase in petrol prices in the last few years continues, it'll be €3 per litre before anything actually happens to VRT!

:rolleyes:

Road tax will probably go up.

Big Balls

I'd rather pay more for petrol and be able to go out and buy a new 335ci !

endplate

Cars would actually be similar in price here as in the rest of Europe. So by removing VRT the value of cars would drop i.e you wouldn't be paying the second tax and possibly the cost of importing the cars would make them slightly more expensive. The government would still get their cut from VAT cos not too many people will be importing cars. That's just my opinion

Vegeta

also instead of young drivers buying sh1t boxes of cars cos their first insurance is so high and that's all they can afford, maybe they'll buy slightly bigger safer cars.

I think car tax would be the fairest thing to put the VRT on, the hike in annual car tax would not have to be huge as it is payed every year while VRT is a once off payment.

Also bigger engine cars although already quite heavily taxed would go up even further whih may make people think about buying 4.6ltr petrol range rovers and getting a more economic car. Then again the bigger engine cars may be more affordable so it could balance out between paying higher tax anually and lower inital start up price.

Either way i think consumers i.e. you and me will benefit from this.

As soon as VRT is gone and I pass my test, new 1.8 ltr civic thank you very much

smash

I'll believe it when I see it. Motor dealers in Ireland have spent hundreds of thousands in court cases to get VRT removed but have never had a successful outcome.

Mailman

VRT may contribute loads to the government's budget but the consumer suffers disproportionately as it creates a cartel in the local market with a barrier to entry that is impossible to avoid.
The government knows there is a cartel there but they don't care about the electorate as they just want their revenue stream and are happy to see us endure it.

The cartel that is currently in operation is adding thousands more to the price of a car over and above the taxation element of the retail price of a car.

If we could order new RHD cars from the continent or import secondhand cars from the UK without paying a TAX based on the retail (cartel fixed) price of the product on the Irish market we'd save thousands on each unit.

The competition authority are investigating price fixing in the industry but Government make sure they have no teeth so nothing changes.

VRT has been discussed over and over again here on boards.
No one in favour of the tax has ever been able to tackle the issue of the high retail prices of cars in Ireland over and above the VRT element and the limited ability to haggle on price.

Mailman

steve06 wrote:

I'll believe it when I see it. Motor dealers in Ireland have spent hundreds of thousands in court cases to get VRT removed but have never had a successful outcome.

Know your enemy - the enemy is the franchised motor dealer through SIMI.

Private importers have had some success in challenging VRt but the process is slow and the Government take everything all the way to the supreme court and beyond.
Revenue are also playing dirty too.

Government has an inexhaustible war chest to fight to keep VRT so they just litigate the anti-VRT lobby out of existence.

maidhc

I really dont see why people make such a fuss. We will all end up paying more or less the same levels of taxation anyway.

Sure a car in France is much cheaper than here, but their rates of personal taxation are much higher. The UK have cheaper cars, but pay far more in fuel. You can say we have loads of "stealth" taxes, but so does every other country.

On the balance, I do think VRT will go, probably on a phased basis over maybe 5/10 years. But it will be replaced by something else.

Mind you I think it is a fair enough tax. It hits the wealthy (those who can buy large new cars) far more than the less well off (small capacity cars, s/h cars). It is good for the environment (1.4 cars promoted rather than 2.0 cars), and it is discretionary tax: You can buy old cheap cars where the VRT has mostly been worn off if you wish to avoid it.

Lex Luthor

It sounds like a new tax will be introduced based on the CO emissions....

Mailman

Maidhc - the issue is not how the collection of taxes is balanced.
The issue is that thousands of euro go to the Motor Industry on each new or secondhand car because there is a cartel in operation.
The cartel is in operation because VRT is in place - it's the invisible barrier to entry that allows motor dealers to raise prices without being exposed to the European free market.
It's money that should be in the consumers pocket that is the motor dealer's pocket(it never gets to the revenue coffers to benefit society)

Sleipnir

Lex Luthor wrote:

It sounds like a new tax will be introduced based on the CO emissions....

That's fine too. It means I can buy a new car with lower emissions more often then I can now. If the price of petrol goes up, then that's fine too because those who use their cars a lot will pay more tax than those who only use it occasionally.

maidhc

Mailman wrote:

The cartel is in operation because VRT is in place - it's the invisible barrier to entry that allows motor dealers to raise prices without being exposed to the European free market.

I agree there are major issues with how the VRT is applied to s/h cars and new imports. In particular the Micra/March farce is just that. I think though it has been well litigated in the ECJ that an equal burden tax (such as VRT, or duties on spirits) is well justified and does not affect competition.

fatboypee

I find VRT the most unfair of taxes and personally don't understand the "Oh Well, they gotta tax us somehow" argument. This tax in my humble opinion goes wholly against the spirit of free trade across the EU, just because this tax has been levied in the past through necessity does not mean it should continue to be levied now just because the government is used to the cash !

We are a nation of surplus cash, implying they NEED to tax us in other ways to abolish this unfair duty is ludicrous.

The point being made here is that this government sees fit to tax the cr@p outta people and continue to do so regardless of opposition.

I can perhaps understand a "New Registration Tax" being levied as its should be a first tax on a new car for registration but not second hand ones, in EU terms they've already been taxed....

Fatboy.

Anan1

Mailman wrote:

No one in favour of the tax has ever been able to tackle the issue of the high retail prices of cars in Ireland over and above the VRT element and the limited ability to haggle on price.

How do you mean?

Vegeta

How can anyone think VRT is ok???

I know they will just make up the revenue by taxing something else but i'd like to see what that somehting else is. Income tax here is pretty low compared to other European countries but VAT is 21% on everything, be you rich or poor you pay VAT at 21%.

In America (not in Europe i know) but the VAT was about 6-8% depending on the state you were in.

maidhc

Vegeta wrote:

In America (not in Europe i know) but the VAT was about 6-8% depending on the state you were in.

I don't think anyone in Ireland would be too happy if fees for university jumped to 40k p.a., if pretty much all our social welfare system was scrapped and public education downgraded.

el tel

Years ago, didn't the Irish government combine road tax with the fuel duty for a few years but then decided to separate it again but did not reduce the fuel duty accordingly? May be it was the British...I can't remember.

If they did they are cheeky monkeys.
If they didn't, then perhaps they might...I wouldn't put it past them.

Mickk

fatboypee wrote:

I can perhaps understand a "New Registration Tax" being levied as its should be a first tax on a new car for registration but not second hand ones, in EU terms they've already been taxed....

Fatboy.

Isn't that called vat?

Joeface

They were discussing this on Today Fm yesterday evening .......Now im not sure of the figure but I was sure the Gov guy said it was €1100million They made on Vrt over last year or the last number of years..and he claimed that ,Like some ppl have said here that they would have to get it some where else.....THIS is not true . this Tax money is wasted anyway, it isnt needed, For the goverment to do without VRT its easy, for example when they start a new project and are Quoted 500million for the project , accept it and make sure that it comes in on budget instead of handing over twice the quote for the completed project like what keeps happening.....If i quoted a customer one price , did his design and turned around and asked him for twice my orignal quote he would tell me to go F*** my self, and point out that the contracted stated the agreed upon price , if the state did this VRT could be abolished very very quickly with out the need for a new tax

Mailman

In reply to Anan1.

There is an unspoken agreement between the dealers that they will not drop the price of a car below a certain level - Primetime did a programme on it and it has been under investigation for years by the competition authority.

In UK and Europe dealers compete for business and even if they don't you just go off to a car warehouse to buy nearly new cars at massive discounts.

Only thing that makes it appear that we are beign subsidiesd is because RRPs in the UK are high but the larger portion of cars in UK don't get sold off forecourts but rather through fleets/warehouses

fatboypee

The point in question here is the validity of VRT as a tax. If the government needs revenue for whatever purpose it should propse the method of fairly gathering that revenue. VRT is against the ethos of EU fair trade yet, we hear "We're gonna hafta get it from somewhere so we might as well keep VRT"..

same case in point over the inequality of the taxation system with regard to roads, health, etc etc etc.. I could go on but the issue here is that the nufair levvying of this particular tax should be addressed and a fairer way of gathering revenue established, setting out the reasons for need for the revenue and undertaking to spend the revenue gathered specifically on the taxable item/service. I.e. Roads...

heeeheeeeeheeeeheeeee.... what a joke....

Suppose we can all dream...

Bit like saying "we'll toll you for use of a road or a bridge to pay for its construction" and then neglecting to remove the toll once the bridge has been paid for a hundred times over....

And no, ineptitude and bad management/planning are no excuse.

Fatboy.

layke

Well I can see the EU forcing the gov to drop it. AS for a surplus of tax, well we are makeing less money then we are spending so we need the tax. I'm confident the ol' insurance will keep people from buying 4.6l cars.

Personally, i'd rather pay the VRT without seeing a crippling Road tax bill every year. However I'm all for the EU taking the gov down a peg or two in the tax areas. It will publically show that their methods are unfair in taxation.

junkyard

The Mafia run a similar kind of thing around the world, its called extortion. As I always say at least the Mafia will keep an eye on your property the tax man just takes the money and runs.

smash

maidhc wrote:

Mind you I think it is a fair enough tax. It hits the wealthy (those who can buy large new cars) far more than the less well off (small capacity cars, s/h cars). It is good for the environment (1.4 cars promoted rather than 2.0 cars), and it is discretionary tax: You can buy old cheap cars where the VRT has mostly been worn off if you wish to avoid it.

First of all, If you bring in a big new car you can still end up paying less than the Irish price for it, so it doesn't actually hit the wealthy!!!!!

Secondly, Why should you be penalised for making money, that's a stupid statement. This tax is for nothing other than greedy politicians, like stamp duty!

If you see a car that you like within the EU and you buy it, why should you be taxed for that!

I also think if VRT was gone then it would clamp down on dodgy dealers bringing in cheap unroadworthy cars and selling them with no history for a lot more than they're worth, because people would be able to bring in a car themselves.

Vegeta

maidhc wrote:

I don't think anyone in Ireland would be too happy if fees for university jumped to 40k p.a., if pretty much all our social welfare system was scrapped and public education downgraded.

well they wouldn't be 40K anyway they are about 10K in UL in Ireland

But my point is we are paying high VAT and reasonably normal levels of income tax. So most people under the 30,000 a year mark feel they are not getting taxed too heavily but in reality they are because of thigs like VAT, VRT inheritance tax, capital gains tax, stamp duty on houses, import duty etc.

dts

Remember the car you own now will be worth nothing if they scrap VRT. Look at the value of second hand cars in the UK. That 2 year old car you just paid 20grand for will now only be worth 10. This will mean the difference between your old car and the new one you want to buy will probably remain the same. And yes they will tax you somewhere else as well!

Ice_Box

The Government wont do a thing on VRT until we all have our SSIA's spent.

fatboypee

dts wrote:

And yes they will tax you somewhere else as well!

So we're screwed allways round... Nothing new there... the sad thing is the inequality of the taxation system in general I would much prefer a system whereby the tax collected in the name of something gets used primarilly for that item:

Roads go on roads
PRSI on healthcare and wellfare...

etc etc...
After all we all taxed to use the roads, yet we still have to pay tolls ?? Wtf is that all about ?

The thing with a transparent and accountable taxation system like that is it would show up this country for what it is, one step off bl00dy useless and absolutely fking wasteful with what we've all worked damn hard to hand over in tax in the first place..

I know... tell you something you don't know...

FBP.