Motor tax revenues down by €80m as more low-emission cars are sold

Motor tax revenues, which partly fund the State’s road maintenance programme, are down sharply despite a 20 per cent increase in new car sales as motorists increasingly opt for cars with lower carbon emissions.

Revenue is expected to fall by nearly €80 million in the full year, a 6 per cent drop, according to figures from the Department of Transport provided to Barry Cowen, Fianna Fáil's local government spokesman.

Warning about the effects the falling revenues could have on local authorities, Mr Cowen said that some “have seen revenues from motor tax decline by 15 per cent this year alone. This could lead to roads budgets being slashed even further.”

“They are already struggling to maintain roads, with their spending on average amounting to only 50 per cent of what is required to keep roads in a good condition,” the TD said.

In 2008, the Fianna Fáil-Green Party government introduced a motor tax regime based on carbon dioxide emission in an effort to encourage the purchase of more environmentally friendly vehicles.

Critics have long argued that the tax could lead to a sharp fall in motor taxes.

Motorists quickly adapted and bought more diesel cars between January and July. Of the 119,952 cars taxed in that period, some 70 per cent were diesel marques, according to the Central Statistics Office.

“We need to see a Government review of motor tax to assess the impact of the tax changes,” Mr Cowen said. “The Government subsidy to the Local Government Fund may also have to be increased to compensate for the fall in motor tax revenue.

“The level of under-investment in maintaining the roads network over the last five years is irresponsible and self-defeating. By failing to keep a minimum level of maintenance investment, large-scale capital costs are being piled on the shoulders of future governments.”