Finance minister says Government has no plans to tax cars by weight in the short-term

As more people switch to electric vehicles (EVs) and cars with fewer pollutants, taxes collected on the more polluting cars will fall away, creating a deficit of around €1.5bn. Currently, taxes on cars in Ireland are based on emissions rather than weight, as is the case in countries such as the Netherlands and Belgium.

Environmental campaigners have long called for heavier and bulkier vehicles to pay more in tax, arguing that the likes of SUVs are unnecessary for Irish drivers.

However, Michael McGrath said the strategy papers published this week were advisory and did not have any “political input”.

Speaking in Cork, the Finance Minister indicated such a system would be for future governments to decide.

It is certainly the case that over time, the taxation that we collect from the transport sector will reduce because more and more people are buying EVs. Of course, the amount of excise that we collect will also reduce as behaviour changes, and as the transport system is electrified.

“Over time, that is something that the Government and future governments will have to consider, how we provide for any loss of revenue in that area, by other decisions that may need to be made.”