Motor Tax Bands

[michaelm]

Another gormless decision. He should have simply scrapped motor tax and put it on petrol i.e polluter pays. It would then have applied on a usage basis to all cars on our roads, old & new plus the many non Irish-registered (and thus not taxed) cars. It would have been simple and fair. The proposed system is less than family-friendly and it will equally penalise those who will use PPO or Ethanol. Scrapping the current system would have removed overheads in relation to administration, enforcement, and time and money wasted prosecuting, and possibly imprisoning, dodgers.

 

[FMW]

Excellent letter SPC100. As well as sending to the politicians who will probably ignore it, you should try to get it published in sone of the newspapers. From talking to colleagues & friends, I feel that a lot of people don't realise the full side effects of these new tax rates. With a bit of publicity, that may change. Adverse public comment is probably the only thing that might encourage the minister to look at it again. I'm going to work on a few letters of my own along similar lines. Great work.

 

[FMW]

For those interested, I have put some information on the impacts of the new motor tax rates on a (fairly basic) web page. The link is below - please feel free to circulate this to anyone who might benefit from the information.

http://members.lycos.co.uk/irishmotortax2008/Index.htm

Excuse the basic format - as you might guess, I'm not a web designer.

 

[upport]

Fantastic summery FMW.
Great work.
Please clarify point #3 of heading 'low emissions car' re '....wait for 2006 models to come onto the market....'

 

[werner]

Well done SPC100

Through public opinion the Government has been persuaded to stall their unwarranted salary increases

[broken link removed]

With enough public pressure they will revise the economically damaging and ill thought out VRT/Motor tax increases

My mail is already sent

 

[FMW]

Fantastic summery FMW.
Great work.
Please clarify point #3 of heading 'low emissions car' re '....wait for 2006 models to come onto the market....'

Sorry......typo there....I meant wait for 2008 used ones to come on the market......I'll fix this now.

 

[Firefly]

For those interested, I have put some information on the impacts of the new motor tax rates on a (fairly basic) web page. The link is below - please feel free to circulate this to anyone who might benefit from the information.

http://members.lycos.co.uk/irishmotortax2008/Index.htm

Excuse the basic format - as you might guess, I'm not a web designer.

Well done on that, thanks.

(Yet another reason to buy an Octavia 1.9tdi)

 

[alcyone]

I am and I am.

Good for you.

I am sympathetic to the environmental concerns that underly Green issues, but I did not vote for them because I believe they are politically naive and possibly more emotively driven rather than pragmatic.

With this first green scud missile straight to the heart of their core voters my estimation unfortunately has proven to be correct.

VAT on children's shoes. Hands up all who can remember that one????

 

[alcyone]

Re: Market effects of new tax bands.

Why are you amazed?

All Green policies are High Tax policies always were and always will be.

Is there anyone from the car trade that would like to comment since they made representations via S.I.M.I. to the gov.?

Prepare to chuck up if there is.

The car trade is easy to predict. They have one agenda only, and that is protection of the profits of members.

Their primary problem with this new legislation will be getting the government to agree to a means of either restricting imports of second hand cars that will be favoured by the new tax rates, or else if impossible to restrict imports, get them heavily taxed so it is not financially beneficial.

This will be promoted on the basis that these imports will skew the market and cause job losses or else they are probably less green than the ones they are selling new.

Watch this space. You read it here first.

 

[alcyone]

I agree michaelm, i have made this point repeatedly to anyone who would listen to me.

Here is my letter....

To: [email protected]
CC: [email protected], [email protected], [email protected]

Re: Punishing citizens who were proactive about lowering their car emissions
cc: askaboutmoney.com Budget 2008 forum
(http://www.askaboutmoney.com/showthread.php?t=69742)

Dear Minister,

I am delighted to see that this budget includes measures to
disincentivise (spelling?) people from using cars with higher emissions.
Pollution and energy shortages are some of the biggest challenges facing
Ireland inc. over the next few years. In my opinion it is correct to use
carrots and sticks in this area.

One side affect from your proposal, is that the group of people who have
been proactive by already choosing low emission/fuel efficient cars will
suffer financially. By applying a lower VRT, and lower tax only to newly
registered, fuel efficient cars, you are effectively reducing the value
of the cars of citizens who have exercised personal proactivity in this
area. The same applies in reverse, citizens who have purchased high
emission vehicles will see their car value increase.

This is an abhorrent side effect for a proposal aimed at encouraging
people to reduce emissions, and discouraging people from using high
emission vehicles.

At a macro level, we need citizens & companies more than ever to be
proactive about energy use, pensions etc., therefore it seems very
inappropriate to punish people, who should be commended for being proactive.

I would like to see your proposal reward existing owners of low
emission/fuel efficient vehicles ( I would propose that you use the NCT
test results where suitable certificates are not available), or at the
very least be revenue neutral for these citizens.

I find it unacceptable that the value of previously registered cars with
low emissions will fall, while the value of previously registered cars
with high emissions will rise.

I would like to hear how you propose to resolve this anomaly.

Is mise le meas,
Sean xxxx.
P.S.
As an aside, I am unhappy that you did not choose a straightforward
revenue neutral system like scrapping road tax, and adding the required
number of cents to a litre of fuel. This would target/incentivise
directly the largest polluters, free up the entire road tax
group/department (a considerable saving for the state), free up Gardai
time(a considerable saving & benefit for the state), increase compliance
(by definition), simplify our taxation system(by definition), and
improve productivity/work-life balance by saving the average employed
citizen 1.5 hours of effort per anum.

A very well worded letter. They would have already looked at and disregarded your approach to CO2 tax on the petrol. There is no chance this method will be adopted, even though anybody who looks at the numbers will agree it is the fairest way of implementing the "polluter pays" principle.

The two primary and non "revenue neutral" reasons for ignoring this fairest method of CO2 tax implementation are as follows:

1) It will put the consumer price index through the roof.
2) It will kill the revenue leakage from the North of Ireland with everybody north of the border currently buying millions of pounds worth of fuel in the South and bringing in "free" revenue.

Other than that, it's perfect.
[Rule Number 1: this is all about money, not green issues]

 

[polaris]

I think they also fear a backlash from country people who are totally reliant on cars having no access to public transport. Similarly, those who have been forced to move out from Dublin due to high house prices and consequently have long commutes and little or no public transport options would not be happy.

Rightly or wrongly, these approach will be seen by the public as targetting those who drive SUVs etc and they won't get much sympathy.

 

[michaelm]

The two primary and non "revenue neutral" reasons for ignoring this fairest method of CO2 tax implementation are as follows:

1) It will put the consumer price index through the roof.
2) It will kill the revenue leakage from the North of Ireland with everybody north of the border currently buying millions of pounds worth of fuel in the South and bringing in "free" revenue.

I'm not sure point 1 is so important. It could be ignored for CPI calculations or discounted as a one-off blip on the index. I suspect that the increased revenue from all the non Irish-registered cars on our roads would compensate (in tax terms) for the losses from cross-border trade.

To calculate the overall increase per litre I'd image it's a simple enough calculation such as . . total motor-tax take (less estimated cost of overheads i.e. Administration, Garda time, Court time and any cost associated with imprisonment) divided by total litres sold in the Republic (less estimated litres sold to cross-border customers).

 

[upport]

FAO ALCYONE,FMW and other aggrived motorists....apart from mailing the ministers who will probably only laugh at our best efforts ,why not hit the airwaves i.e mail '[email protected]', Joe Duffy,Gerry Ryan......if these anommalies were discussed in public,those responsible for imposing this farce on low emission car owners would be exposed to ridicule and might comprehend that this worthy scheme could be introduced without infringing upon those of us who are already converted to greener thinking.

 

[alcyone]

For those interested, I have put some information on the impacts of the new motor tax rates on a (fairly basic) web page. The link is below - please feel free to circulate this to anyone who might benefit from the information.

http://members.lycos.co.uk/irishmotortax2008/Index.htm

Excuse the basic format - as you might guess, I'm not a web designer.

Excellent work FMW.

Very informative and thank you for the effort.

 

[alcyone]

Alcyone, the CPI thing I had considered as the prime reason they would be unwilling. We are a high cost economy, and figures backing that up even further, would not be good for our economy.

SPC, don't underestimate the cost to the economy of road tax incorporated into fuel costs. All goods in all supermarkets are delivered by road. As the diesel cost will rise for vans and trucks the same as cars, the transport sector will pass on these charges, thereby increasing the cost of everything we buy. This would be no small or one-off effect.

I didn't think of cross border fuel trade thanks for pointing that out. Even with a surcharge, it could still be cheaper, so it might not see a complete fall, and an increase in tax on the fuel, could even see the govt making more money, albeit through fewer litres sold.
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No, the cost of our fuel will then be higher than Northern fuel, even with Stg differential. We would then be back in a situation of outflow of revenue, where everybody would drive north to fill up. Lose/lose, unfortunately.

I agree with that, it would be a one time blip, that could be explained, or even excluded (As it would be done in a revenue neutral fashion, the average consumer cost should still be the same). I don't know the processes used when calculating the CPI, so not sure how feasibile/legal it would be to exclude, but it seems like common sense to me.

No, sorry, the figures or calculations would not support that.

This "increase" would be already factored in when doing the revenue neutral calculation (as they are already buying fuel). The actual increase would be in future revenue due to automatic compliance i.e. any car in the future that comes into the state could not opt out from paying road tax, as they would now pay road tax via fuel.


I wonder what the extra cost on the petrol would be.

Does anyone know/estimate a)total motor tax take b)total number of litres of fuel sold for use in vehicles?

A rough calculation, basd on average family car figures. [excuse the old-fashioned miles, I'm showing my age here]

12,000 miles annual mileage
30 mpg reasonable consumption average
400 gallons used in a year @ cost of €1.17/l approx current.
Average road tax €600
Amount to be added per gallon to replace road tax = 600/400 = €1.50 per gallon.
Amount to be added per litre = €1.50/4.5461 = 33 cent per litre.

New cost [for the average car] per litre for petrol = 1.17 plus 0.33 = new road tax inclusive cost of €1.50 per litre.

Current cost of Northern petrol at £0.95 Stg converted to Euro at 0.71 is €1.34.

Result: Serious outflow of fuel revenue to NI stations. Not revenue neutral.

 

[alcyone]

To all askaboutmoney members: Feel free to distribute this....

Christmas Message from the Minister for the Environment to Owners of High Emissions Cars.

Dear High-Emissions Motorist,

Now that Christmas is approaching, I would like to announce a special gift for all owners of high-emissions vehicles. I would like you to continue to enjoy your polluting ways and I have therefore ensured that my new annual motor tax system will not penalise you. You will just continue to pay your motor tax on the same basis as you always have. To reward you for your choice of vehicle, my new system will also ensure that you will enjoy a discounted rate of motor tax after 1st July 2008. While the rates for new high-emissions cars will rise substantially after this date, you will be protected & will continue to enjoy the current lower ones.

For those of you who have not yet purchased your gas guzzler, I am giving you another six months during which you will be able to do so. And you really should. If you buy one before 1st July 2008, I will ensure that you enjoy all the same benefits as those who have already made this choice. You will also get the discounted rate of motor tax after July 1st. As an added bonus, the trade-in value of your vehicle will probably rise because it will continue to benefit from the lower tax rate indefinitely.

Don’t worry about those idiots who believed us and have bought their low-emissions car in the last few years. As they’re already signed up, we will just rip them off. I have ensured that their cars will continue to be stuck on the high motor tax rates permanently. After July 1st, they will be at a serious disadvantage and their cars will probably depreciate heavily as a result. To make certain of this, I have decided that my new tax rates will also apply to imported used cars. Low emissions ones imported after July 1st will benefit from much lower motor tax rates than identical ones already registered here. I really can’t stop congratulating myself on the cleverness of this – it will just crucify the resale value of all existing low emissions cars. I’m sure you will take great pleasure in the fact that those who have already chosen the cleanest cars (e.g. the Toyota Prius and family-sized diesels like the Skoda Octavia TDi) will probably fare worst of all.

Once again, my message is clear – continue your high emissions motoring & I will continue to look after you. I wish you a Happy Christmas and pleasant motoring in the new year.

Yours Sincerely,

John Gormless

Your Green Environment Minister,
Supporting High-Emissions Motoring in Ireland.

Ha, ha, very funny and caustic, I like it

I think you are being a little hard on the Minister here with your perception that he has purposely advantaged "gas guzzlers"

These tax changes are so radical in approach, it is a blunt instrument. Effectively he has changed the system to hurt large and heavy consumption private car buyers, and to make low consumption cars more attractive to purchase.

This change is radical and almost revolutionary, and in every revolution there are casualties.

If I had voted him in, and saw he did this much so soon I would be proud of the advance and support him.

In fact I'm putting my money where my mouth is, and changing to a lower consumption vehicle next year.

The six months lead in is ostensibly to allow motorists to make better financial and greener choices in the cars they buy. In fact and in reality the motor trade orders all new cars months in advance, and it is also to accommodate their order system so that they can have the correct cars that people will want based on the new system. Fair enough really.

No harm letting him know where the new regime is wrong and fight for rectitude, but he should be supported in the general thrust of the new legislation.

 

[michaelm]

Result: Serious outflow of fuel revenue to NI stations. Not revenue neutral.

Indeed, based on your assumed average for mileage, fuel efficiency and road tax, any or all of which may be wrong. You may be too quick to shoot down the idea. The AA reports petrol and diesel prices in the North to average €1.41 and €1.44 respectively for November. Also, taking into account cost savings re the removal of overheads and the increased revenue re non Irish-registered vehicles, which you haven't done, could make a big difference to the actual required increase. I'm sure the DOE would be able to calculate the correct figure if they weren't otherwise busy calculating Ministers and Civil Servants air-miles, with the intention of spending my money and yours on personal carbon credits to offset against said air-miles, despite the fact there is no onus on them to do so.

 

[upport]

Re: Market effects of new tax bands.

That is a well made point alcyone.

The problem is, it is easy to criticise, but need to have an alternative. (Fuel tax is the most desireable)

But being realistic about what will happen, Does anyone see some small easy to administer tweaks that could be made to the current proposal that would incentivise greener motoring without unduely punishing the already converted?

'Tweaks' needed, imo if new vrt on new cars was introduced 1-1-08 and all existing low emission cars be allowed vrt rated road tax on their renewal then everyone would win.
If time constraints didn't allow set up for 1-1-08,then a promise of refund of overpaid vrt to new car owners would mean that people could proceed immediately with purchases in good faith.The alternative is defer purchase until July 08 or Jan 09.

 

[werner]

Mr Gormless!

I note your festive letter is causing quite some interest here!

[broken link removed]=

To all askaboutmoney members: Feel free to distribute this....

Christmas Message from the Minister for the Environment to Owners of High Emissions Cars.

Dear High-Emissions Motorist,

Now that Christmas is approaching, I would like to announce a special gift for all owners of high-emissions vehicles. I would like you to continue to enjoy your polluting ways and I have therefore ensured that my new annual motor tax system will not penalise you. You will just continue to pay your motor tax on the same basis as you always have. To reward you for your choice of vehicle, my new system will also ensure that you will enjoy a discounted rate of motor tax after 1st July 2008. While the rates for new high-emissions cars will rise substantially after this date, you will be protected & will continue to enjoy the current lower ones.

For those of you who have not yet purchased your gas guzzler, I am giving you another six months during which you will be able to do so. And you really should. If you buy one before 1st July 2008, I will ensure that you enjoy all the same benefits as those who have already made this choice. You will also get the discounted rate of motor tax after July 1st. As an added bonus, the trade-in value of your vehicle will probably rise because it will continue to benefit from the lower tax rate indefinitely.

Don’t worry about those idiots who believed us and have bought their low-emissions car in the last few years. As they’re already signed up, we will just rip them off. I have ensured that their cars will continue to be stuck on the high motor tax rates permanently. After July 1st, they will be at a serious disadvantage and their cars will probably depreciate heavily as a result. To make certain of this, I have decided that my new tax rates will also apply to imported used cars. Low emissions ones imported after July 1st will benefit from much lower motor tax rates than identical ones already registered here. I really can’t stop congratulating myself on the cleverness of this – it will just crucify the resale value of all existing low emissions cars. I’m sure you will take great pleasure in the fact that those who have already chosen the cleanest cars (e.g. the Toyota Prius and family-sized diesels like the Skoda Octavia TDi) will probably fare worst of all.

Once again, my message is clear – continue your high emissions motoring & I will continue to look after you. I wish you a Happy Christmas and pleasant motoring in the new year.

Yours Sincerely,

John Gormless

Your Green Environment Minister,
Supporting High-Emissions Motoring in Ireland.

Mr Gormless

I note your festive letter is causing quite some interest here!

[broken link removed]=

 

[alcyone]

Indeed, based on your assumed average for mileage, fuel efficiency and road tax, any or all of which may be wrong. You may be too quick to shoot down the idea.

Sure, I accept that. I used the word "rough" for the calculation. In fact the average of all the new July 08 bands is €653, but the exercise was only as a possible average indicator. My estimate of 33cents could just as easily be conservative or much too low.

The AA reports petrol and diesel prices in the North to average €1.41 and €1.44 respectively for November.

That's accepted. Those also are averages. I'm going by prices I see on the road. If I cross the border to get petrol or diesel I won't go to average garages, I'll only use the ones that show lowest prices to attract business, just like the ones near the border currently have to.

Also, taking into account cost savings re the removal of overheads and the increased revenue re non Irish-registered vehicles, which you haven't done, could make a big difference to the actual required increase.

Unrealistic. I haven't included an estimation for this because I don't agree the point. You can't make a presumption that there would be any savings in overheads at administration level. This is Ireland. We don't do efficient.

There could indeed be revenue from non-Irish registered vehicles paying a certain portion of road tax in the fuel cost, fair point. How much might this revenue bonus be off-set by a probable drop in tourism when our high cost of petrol and diesel becomes generally known?

I'm sure the DOE would be able to calculate the correct figure if they weren't otherwise busy calculating Ministers and Civil Servants air-miles, with the intention of spending my money and yours on personal carbon credits to offset against said air-miles, despite the fact there is no onus on them to do so.

Fair point, but it think it is way past time there was a carbon tax on aviation fuel. I'm pretty sure if you check the background of people grumbling about the new rates and congratulating themselves for being proactive about buying economical vehicles, you will find some of them have far less scruples about jetting off to New York or Paris for shopping, or holidays in Miami or Bali or the Canaries. Or the latest trend of children taking a "year out" in Australia or New Zealand. Any one of which air trips pumps enough CO2 per passenger carried to outdo a whole fleet of SUVs.

People need to get real about what the problem is.