The Government has given "green" tax breaks of more than €3.5 million to the drivers of luxury high performance cars and SUVs this year, it has emerged.
The vehicles, which cost €73,000 to €83,000, produce more greenhouse gas emissions than a standard family car, but attract a VRT rebate as being environmentally friendly as they have "hybrid" engines part-powered by electricity. The Government has purchased five of the luxury saloons, three of which are now being used as Cabinet State cars.
Yesterday the Green party said the tax break highlighted a lack of action by the Government on its commitment to change the motor tax system to promote low emission vehicles through lower motor tax and VRT rates. The commitment, made earlier this year, is not expected to be acted on until next year or 2008 at the earliest. The green VRT rebate is given to cars which are electric, part-electric or run on biofuel, regardless of their levels of emissions.
According to figures provided by the Department of the Environment, 232 luxury SUVs which qualify for a VRT rebate have been registered in the State this year. The Lexus RX 400h attracts a VRT rebate of €11,662 because it has a hybrid engine. A further 60 of the Lexus GS 450h, a luxury hybrid saloon, have also been sold, according to the figures.
Each of these attract a VRT rebate of €13,568 , and are being used as State cars by the Minister for the Environment Dick Roche, the Minister for Sport John O'Donoghue, and the Attorney General Rory Brady.
The Minister for Energy and Natural Resources, Noel Dempsey, was due to receive a Lexus but decided against it as it produced more emissions than a diesel executive car. The hybrid SUV produces 189g of carbon dioxide per km travelled, while the hybrid saloon produces 186g per km, which is a third less than similar-sized, petrol-only vehicles. This compares with standard four-door petrol saloons which produce in the region of 160g per km, a similar level to diesel-powered executive cars.
The most popular hybrid to date, the Toyota Prius, cost the State €1.26 million in forgone taxes for the 299 vehicles sold to date this year. Lexus Ireland's managing director Mark Teevan said the hybrid technology was not "the saviour" of the environment, but it had a serious contribution to make to emissions reductions.
The Department of Finance defended the tax break, introduced in 2001, but added it was being kept under review.