Moves to remove VRT

Kersh

They should throw a 33% tax on new house purchases, (on top of stamp duty) to create a double tax on houses (like Vat + Vrt on new cars). Watch everyone scream when that happens......I bet no one would support it and the government would be heaved out.
So why the support for Vrt.. some people saying 'well they gotta get the taxes from somewhere'

Vegeta

layke wrote:

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.

How would the road tax be crippling, you will be paying a small increase every year for say (15-20 years as a driver) rather than a huge amount on the new car.

This will allow you to buy a nicer car or a car that has a small efficient engine which would be cheap on tax anyway.

In fairness people who buy cars with big engines get shafted, they pay a fortune in road tax every year and use loads of petrol, which has tax on it.

Ok what would VRT be on a brand new 06 1.4ltr civic???

maidhc

Kersh wrote:

They should throw a 33% tax on new house purchases, (on top of stamp duty) to create a double tax on houses (like Vat + Vrt on new cars). Watch everyone scream when that happens......I bet no one would support it and the government would be heaved out.
So why the support for Vrt.. some people saying 'well they gotta get the taxes from somewhere'

They made 80k per house sold last year, although at least you dont have to pay stamp duty on VAT.

Vegeta wrote:

In fairness people who buy cars with big engines get shafted, they pay a fortune in road tax every year and use loads of petrol, which has tax on it.

Is that not inherently sensible? Whether it be a taxation by co2 or fuel is it not right that as a society we should promote efficient cars?

Kersh

They made 80k per house sold last year, although at least you dont have to pay stamp duty on VAT.

Im sure if they introduced it there would be uproar, so why do motorists pay vrt on top of vat...

maidhc

Kersh wrote:

so why do motorists pay vrt on top of vat...

Simple answer:

a) It is legal, or
b) If it isn't legal no one has sought a declaration in the courts to that effect, and
c) There isn't enough public outrage to motivate the politicians to change it.

Anan1

layke wrote:

I'm confident the ol' insurance will keep people from buying 4.6l cars.

It's been a while since my insurance cost more than my tax.

Gurgle

maidhc wrote:

c) There isn't enough public outrage to motivate the politicians to change it.

lol
Public outrage?
In Ireland, where apathy rul

ninty9er

I don't personally agree with VRT but consider the Scandanavians pay MORE for their cars and some up to 57% PAYE, we're not doing too bad.

A Flat rate based on cc woudl be more suitable imo rather than value

ninty9er

Mailman wrote:

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)

C'moff it. If motor dealers were profiting from VRT they wouldn't be spending vacuous amounts of money on battling this tax. I know this, my uncle was the president of SIMI last year.

Dealers have a built in profit margin in cars, but larger dealers mainly make profit on the difference between trade-in value and relsale on s/h cars and servicing

Flangemonger

Anan1 wrote:

It's been a while since my insurance cost more than my tax.

Dude, you're either an even older fart than I am, or you have a serious brute of an engine in there!

Gatster

The UK have cheaper cars, but pay far more in fuel.

The Uk pay an average of the equivalent of about €1.37 on fuel, I paid €1.19 the other day (In know you can get it cheaper, but was running low). I'd rather pay €1.37/litre than however many thousands in VRT at once.

if pretty much all our social welfare system was scrapped and public education downgraded.

Yeah, because it's cracking;)

ds20prefecture

ninty9er wrote:

A Flat rate based on cc woudl be more suitable imo rather than value

SO a 170bhp 1.4 Golf costing €40000 would attract less tax than a 100bhp 1.9 TDI? Great system.

The only fair and equitable way to tax a motorist is by having ALL taxes, levies tolls and duties paid at the pump. This is effectively usage based taxation. It's simple to implement, it has all of the mechanisms in place for commercial drivers to reclaim tax and it would discourage thirsty vehicles. People outside of the tax net (e.g. foreign reg cars and classics) would be neatly brought into it. Revenue from fuel generated 3bn of revenue last year. VRT was 1bn. so a 33% hike in fuel would more than cover VRT. Except that you'll be paying the following year too. So a 10% hike in fuel would easy cover all other duties and then some for the lifetime of the car.

On a separate note: The motorist contributes over 4bn to the coffers every year - How much is spent per year on road projects?

Gurgle

ds20prefecture wrote:

The only fair and equitable way to tax a motorist is by having ALL taxes, levies tolls and duties paid at the pump. This is effectively usage based taxation. It's simple to implement, it has all of the mechanisms in place for commercial drivers to reclaim tax and it would discourage thirsty vehicles. People outside of the tax net (e.g. foreign reg cars and classics) would be neatly brought into it. Revenue from fuel generated 3bn of revenue last year. VRT was 1bn. so a 33% hike in fuel would more than cover VRT. Except that you'll be paying the following year too. So a 10% hike in fuel would easy cover all other duties and then some for the lifetime of the car.?

The only issue is they have to keep the cost of fuel significantly cheaper than it is in the north.

Otherwise I agree 100% with the above

Henry Ford III

ds20prefecture wrote:

SO a 170bhp 1.4 Golf costing €40000 would attract less tax than a 100bhp 1.9 TDI? Great system.

The only fair and equitable way to tax a motorist is by having ALL taxes, levies tolls and duties paid at the pump. This is effectively usage based taxation. It's simple to implement, it has all of the mechanisms in place for commercial drivers to reclaim tax and it would discourage thirsty vehicles. People outside of the tax net (e.g. foreign reg cars and classics) would be neatly brought into it. Revenue from fuel generated 3bn of revenue last year. VRT was 1bn. so a 33% hike in fuel would more than cover VRT. Except that you'll be paying the following year too. So a 10% hike in fuel would easy cover all other duties and then some for the lifetime of the car.

On a separate note: The motorist contributes over 4bn to the coffers every year - How much is spent per year on road projects?

Fair point, but why the need to tax classics?

seamus

The key point here is that VRT is redundant. It's a relic of an age where the country had no money, and cars were classed as luxury items, so those who could afford them were taxed to the hilt.

Now it's a cashcow, and our government's budget would still be in the black without it.

It couldn't be abolished overnight though, that would be even more cripplnig for the economy. If you remove VRT on new cars, then suddenly everyone's existing vehicle is devalued by a few grand. Since most people buy vehicles on credit, you're left with severe negative equity. Individually, it's a small amount, but overall it would severely worsen our debt-per-capita more than it already is.

It would have to be phased out - reduced by 20-35% every year for a number of years. Of course, that presents its own problems - people may put off buying a new car for two or three years because they know it'll be cheaper then. SIMI would be up in arms.

Vegeta

seamus wrote:

The key point here is that VRT is redundant. It's a relic of an age where the country had no money, and cars were classed as luxury items, so those who could afford them were taxed to the hilt.

Now it's a cashcow, and our government's budget would still be in the black without it.

It couldn't be abolished overnight though, that would be even more cripplnig for the economy. If you remove VRT on new cars, then suddenly everyone's existing vehicle is devalued by a few grand. Since most people buy vehicles on credit, you're left with severe negative equity. Individually, it's a small amount, but overall it would severely worsen our debt-per-capita more than it already is.

It would have to be phased out - reduced by 20-35% every year for a number of years. Of course, that presents its own problems - people may put off buying a new car for two or three years because they know it'll be cheaper then. SIMI would be up in arms.

yup i agree with seamus

maidhc

I know I am in the minority, but does anyone not think the VRT is a better form of general taxation that just taking it from your payslip? Because that is what VRT is, a form of taxation, and the money is used to pay for the country.

If nothing else you have the option of paying it.

(please don't include in responses: The government doesn't need the money, the government wastes money, etc etc. That may well be true, but neither here nor there for the purposes of this discussion... I would prefer to see more less well off out of the tax net in that circumstance!)

Mailman

franchised dealers and importers are complicit.
They let the government charge VRT and in exchange they get a closed market.
Over and above the introduction of barriers to trade the manner in which OMSP calculated at roughly 10% less than RRP gives motor traders an unseen monetary benefit with regard to declared value of cars versus list price where trade-ins are concerned; Complicated VAT and VRT evasion scheme that Revenue turn a blind eye to.

Don't trust SIMI about anything they say about VRT.

Vegeta

maidhc wrote:

I know I am in the minority, but does anyone not think the VRT is a better form of general taxation that just taking it from your payslip? Because that is what VRT is, a form of taxation, and the money is used to pay for the country.

If nothing else you have the option of paying it.

(please don't include in responses: The government doesn't need the money, the government wastes money, etc etc. That may well be true, but neither here nor there for the purposes of this discussion... I would prefer to see more less well off out of the tax net in that circumstance!)

well to be honest the reason i'd like VRT to go is so i can buy a newer, more economical, safer car.

They should introduce a new tax/duty on tyres to make up for it

Carb

maidhc wrote:

I know I am in the minority, but does anyone not think the VRT is a better form of general taxation that just taking it from your payslip? Because that is what VRT is, a form of taxation, and the money is used to pay for the country.

So assuming that road tax and excise duty covers the costs of roads,enviromental costs etc., why should motorists pay more for other public services than people with no cars. As I've posted previously, the only equitable way to collect tax is through personal taxation, that way your taxed based on your earnings rather than the car you drive. Can you name one public service that costs over 1 billion, that only motorists use?

maidhc

Vegeta wrote:

well to be honest the reason i'd like VRT to go is so i can buy a newer, more economical, safer car.

As would we all! My point is though at least with VRT you have the money in your pocket first, and if things go wrong (e.g. you lose you job, interest rates go up) you can keep the banger and the tax money. If it is taken though higher personal tax, or even through greater petrol prices, you have no option but to pay.

Vegeta wrote:

They should introduce a new tax/duty on tyres to make up for it

NO!!! people are going around on baldy tyres as it is.

seamus

maidhc wrote:

I know I am in the minority, but does anyone not think the VRT is a better form of general taxation that just taking it from your payslip? Because that is what VRT is, a form of taxation, and the money is used to pay for the country.

If nothing else you have the option of paying it.

But we already pay VAT on the vehicles. At 21%. How can a second form of taxation be justified? Imagine if every time you bought a potato, you were charged "Vegetable production tax" on it, which made up a third of the cost of your potato? And further to that, the VAT on that potato was caculated based on the cost of the potato *after* VPT was added?

The basic fact is that VRT is *not* a general taxation. VAT is a general taxation, and VRT is a secondary, specific taxation on the product. Shortcomings from abolition of VRT couldn't, and shouldn't be made up through increasing PAYE. It's functionally redundant.

As Mailman points out, the existence of VRT creates a closed vehicle market, when we should be in a free-trade area. I should be able to go to the UK, buy a car (or indeed, any product including tobacco & alcohol), and bring it back here without having to pay any form of duty on it. And the rest of Europe should be able to do the same.

It also has an environmental impact too. Why would anyone buy a Smart car or a hybrid engine, when a standard petrol engine is that much cheaper.

Smart fourtwo (the tiny smart car). UK price: €9,850. Irish price: €12,995
Smart roadster (very cool, still economical, only 900cc). UK Price: €19,650. Irish Price: €26,995

maidhc

Carb wrote:

So assuming that road tax and excise duty covers the costs of roads,enviromental costs etc., why should motorists pay more for other public services than people with no cars. As I've posted previously, the only equitable way to collect tax is through personal taxation, that way your taxed based on your earnings rather than the car you drive. Can you name one public service that costs over 1 billion, that only motorists use?

Motorists make up the majority of Irish people of working age. IIRC about 40% of the entire population.

maidhc

seamus wrote:

"Vegetable production tax" on it, which made up a third of the cost of your potato? And further to that, the VAT on that potato was caculated based on the cost of the potato *after* VPT was added?

I don't dispute that the tax is calculated unfairly, but since no one has challenged it we must assume it is perfectly legal and acceptable. However if you do challenge it in the HC, and win you will get a VRT free car! Mind you no one else will since the recent "A" case concerning statutory rape.

I know we don't charge a tax on spuds, but a certain potato extract can be taxed very highly indeed (alcohol, poteen...)

seamus

maidhc wrote:

I know we don't charge a tax on spuds, but a certain potato extract can be taxed very highly indeed (alcohol, poteen...)

Heh. Actually, unintentionally I used potatoes as a good example - vehicles are no longer a luxury item for many people. Particularly with our dire infrastructure. To recoup losses from VRT, why not increase the available public transport and improve the quality of the public transport. Then more people will use it, revenues increase, and hey presto, more cash.

Oh sorry, wrong board

Carb

maidhc wrote:

Motorists make up the majority of Irish people of working age. IIRC about 40% of the entire population.

Well for starters, in any of the large urban centres, with public transport, you'll find there are loads of people who don't have cars. If everbody had cars, I love to see how well a developer could sell an appartment with no parking spaces, or how a landlord could let a unit with no parking. Come to think of it, there are always people in the towns around me who are hitching lifts, waiting for buses or lifts, and that doesn't include the loads of people that walk to the industrial estates in the towns.

You could also have a situation where two people are on 50k a year. one decides he wants a 1.8 honda accord, the other person decides he wants a 2.2. Why should the person that wants the larger engine pay more for the country's public services. Another case might me that somebody on say 25K a year decides he might like a new focus, and some guy on 100k who decides
hes taking his money to the grave might also decide to buy a focus. This means that the guy earning the lowest wage pays a larger percentage of his net wages towards public services. There is just no basis for attaching the tax you pay to the value of the car you're buying.

maidhc

Carb wrote:

You could also have a situation where two people are on 50k a year. one decides he wants a 1.8 honda accord, the other person decides he wants a 2.2. Why should the person that wants the larger engine pay more for the country's public services.

That is precisely my point: He has the option of paying more or less tax as he chooses. He could buy a siecento or an old Merc with a 6L engine, and still pay less tax.

I don't mean to be argumentative about it, I just think it is something people overlook, that VRT is discretionary and allows people to keep the money if they feel they need it for whatever reason.

Vegeta

maidhc wrote:

That is precisely my point: He has the option of paying more or less tax as he chooses. He could buy a siecento or an old Merc with a 6L engine, and still pay less tax.

I don't mean to be argumentative about it, I just think it is something people overlook, that VRT is discretionary and allows people to keep the money if they feel they need it for whatever reason.

What if they put it on top of stamp duty as someone has said already "House Registration tax". well you don't have to buy a house you can rent all your life. Why would would someone ever want to buy a home when they can rent and avoid HRT or buy a second hand house which has an inflated selling pruce due to the initial HRT price.

Sher everyone loves paying more for something than its worth even when its second hand, Its great.

VRT doen't just affect new cars in Ireland it affects all second hand car prices aswell

I also think Carb was asking why a 2.2ltr car costs more to tax than a 1.8ltr

maidhc

Vegeta wrote:

What if they put it on top of stamp duty as someone has said already "House Registration tax".

You should try buying a house in spain. They have thought of things like that, and far worse.

In Ireland, stamp duty is the "HRT". VAT is also payable, the only difference being stamp duty is payable on the pre-vat price. I think though peoples issue with VRT is broader than this.

In theory if the goverment decided not to tax house building anymore house prices should fall by 80k. (As if).

Carb

maidhc wrote:

That is precisely my point: He has the option of paying more or less tax as he chooses. He could buy a siecento or an old Merc with a 6L engine, and still pay less tax.

I don't mean to be argumentative about it, I just think it is something people overlook, that VRT is discretionary and allows people to keep the money if they feel they need it for whatever reason.

Taxes for public services should not be discretionary. Everbody should have to pay their fair share. People should not be able to pay less into the health service, the gardai, the education system, by buying a smaller car, or not buying a car a all. You may see it as a benefit, I see it as unfair.