Parking-space tax flagged to ease traffic congestion

People with car-parking spaces provided by their employers may be required to pay benefit-in-kind (BIK) tax as a result of a review announced in the Budget by the Minister for Finance, Mr McCreevy.

Referring to the fact that many civil servants in his own Department and in the Revenue enjoy the "perk" of free parking, he said - somewhat sardonically - that they would be looking forward with "very obvious delight" to devising a "fair and workable system" of applying BIK to parking spaces provided by employers.

It is estimated that there are at least 25,000 free off-street car parking spaces in the centre of Dublin and these are all blamed for adding to traffic volumes.

The prospect of imposing BIK on car-parking spaces had been canvassed by the Minister for the Environment, Mr Dempsey, as part of a range of environmental taxation measures that he wanted to have included in the Budget - even though this measure has been deferred for another year at least.

Nonetheless, Mr Dempsey appears to have succeeded in persuading Mr McCreevy that other steps needed to be taken - such as the changes in Vehicle Registration Tax which discriminate in favour of smaller cars and against larger cars which consume more fuel.

Although Mr McCreevy made it clear that tweaking the tax system "cannot solve the traffic problem on its own", he said it could help to alter the relative prices of different modes of transport "in favour of those that create less pressure on road use and the environment".

Thus, the Government has decided to introduce new tax incentives for "park-and-ride" sites on the periphery of cities to encourage motorists to switch to public transport. In addition, commuters who receive free rail or bus passes from their employers will no longer have to pay a BIK tax.

The Minister for Public Enterprise, Ms O'Rourke, said last night that she expected this measure to result in a "significant switch" by commuters from cars to public transport.

Mr Dempsey also welcomed yesterday's tentative moves towards a "greener" tax code - notably Mr McCreevy's commitment that the introduction of more wide-ranging energy taxes would be placed on the agenda for agreement by the social partners in negotiating a successor to Partnership 2000.

It is believed that the Department of Finance took the view that since energy taxes would add to inflation and wage increases would be index-linked, any move in this direction would have knock-on effects on the negotiations due to start next autumn. The Department wants to keep inflation down.

In his Budget speech, Mr McCreevy said that although energy taxes would have inflationary effects, he accepted the need for an "agreed indirect tax policy which will assist us in meeting our international obligations on carbon dioxide emissions" under the UN climate change treaty.

Last night Mr Dempsey said he intended to keep pursuing this issue.

Meanwhile, extensions of time have been granted to enable the completion of projects in designated urban renewal areas, including Temple Bar, and also for the tax incentives available to developers in 13 seaside resorts. The deadline to avail of these concessions has now been extended to December 1999.

Mr Robert Molloy, Minister of State for Housing and Urban Renewal, hailed a 20 per cent increase in support for local authority and voluntary social housing. But Mr Joe Higgins TD (Socialist Party) said this would come as "a shattering disappointment to the tens of thousands of people on waiting lists".