Vehicle registration tax is a "valuable source of funding" for the Exchequer, according to the Minister for Finance, who rejected requests for a decrease in the rate of the tax.

Mr McCreevy said that receipts for the year to the end of November were in the region of £593 million, with net registrations total ling 170,431. That was an increase of 26,424 on last year's total.

He said a submission from the Society of the Irish Motoring Industry effectively proposed an across-the-board reduction of 2.5 per cent in the VRT rates "despite record sales this year".

The society presented it as an environmental measure but, the Minister said, if it had been accepted, "the result would have been a reduction in VRT to achieve a standard for emissions that new cars must comply with in any event".