VRT increases should be paused until impact on carbon emissions is established — ICCRA
"have Hikes Escaped" Price Picture: Electric Vehicles Larry Cummins The Not
The Government should defer the introduction of the proposed increases in Vehicle Registration Tax (VRT) announced in Budget 2021 until a comprehensive analysis of their impact on carbon emissions is undertaken.
That's according to The Irish Car Carbon Reduction Alliance (ICCRA), which represents the majority of new car dealers, have claimed the new measures are likely to lead to an increase, rather than a reduction in car carbon emissions, as well as negatively affecting sales of all new cars, including electric vehicles.
“Penalising motorists through tax hikes is not going to achieve the emission reductions that the Government is seeking," according to Denis Murphy of ICCRA.
"However, it is likely to ensure that it misses its carbon emissions target again, resulting in significant financial penalties from the EU.”
Denis Murphy, managing director of Blackwater Motors, Cork, said the latest changes would add at least €1,000 to the average price of a car.
“With the second highest rate of car taxation in the EU and the second most expensive cars, new vehicles, which are more carbon efficient, were already taxed beyond the affordability of most Irish motorists,” he said.
“Automatic cars, which are purchased by motorists with mobility issues amongst others, are also being particularly adversely affected,” he explained, adding that electric vehicles "have not escaped" the price hikes.
This flies in the face of the Government’s stated intention to reduce carbon emissions, he said.
Mr Murphy added that the retail motor sector is facing “severe existential challenges” at present, with the government’s six-week lockdown falling in the period when more than 60% of new car orders for January are taken. Car dealerships also expecting “significant disruption” to be caused by Brexit in January.
“We could face a situation where the new car market has collapsed and the supply of used cars from the UK has been terminated.”
Mr Murphy said the reasons behind Ireland’s carbon emissions levels “are more complex than headline-grabbing tax increases are going to resolve”.
“This must be recognised by the Government and we urge them to take the time for an independent expert analysis of the impact of these VRT increases.
"This would ensure that changes are made that will have a meaningful impact on reducing carbon emission levels while safeguarding the future of the retail motor sector,” he said.