Rural motorists will be ‘punished’ under proposed distance car tax

AA Ireland says proposal to tax the distance travelled would see rural motorists pay more

The Government is currently considering numerous schemes to ensure the overall tax take from motoring does not drop significantly as a result of moves to lower emission vehicles. File photograph: Bloomberg

The Government is currently considering numerous schemes to ensure the overall tax take from motoring does not drop significantly as a result of moves to lower emission vehicles. File photograph: Bloomberg

 

Rural drivers could be forced to pay higher levies than urban motorists if the proposed plan to tax the distance travelled by cars is introduced, an AA spokesman has warned.

Barry Aldworth, senior media officers with AA Ireland, said on Monday that the Government proposal to tax motorists on the distance they drive rather than paying excise on fuel at petrol station pumps would result in people in the countryside paying higher fees than those living in cities.

“The Government needs to think long and hard before it makes these changes,” said Mr Aldworth. “We know that as Ireland goes more electric there is going to be a tax shortfall which needs to be addressed but our concerns is distance charging would hit those living in rural communities harder. Because of the history of under investment in rural transport in this country people have become more reliant on their private cars and they’ll be punished.”

The Government is currently considering numerous schemes to ensure the overall tax take from motoring does not drop significantly as a result of moves to lower emission vehicles. Recent policy has been designed to encourage motorists to purchase lower emissions vehicles, which are subject to lower vehicle registration taxes (VRT) and annual motor tax.

However, officials now warn that, although lower emissions will still be incentivised, the move towards such vehicles, particular electric-powered cars, will “severely challenge the revenue” accrued by the exchequer through VRT, excise and motor tax.

Similar proposal

A similar proposal to tax motorists on the distance they drive was mooted when the VRT scheme changed a decade ago but it is understood a predicted backlash from TDs in rural and commuter belt counties stopped the proposal from advancing.

Mr Aldworth questioned how the Government planned to regulate the payment of the proposed charge.

“Right now collecting tax is easy, people just pay at the pump. But how would distance charging work? Would people self-report how far they’ve driven?”

Mr Aldworth added that he was not completely dismissing the idea but that a proper plan was needed to ensure the system would work.

“It could be a tiered system whereby if you’re driving in an urban area with alternative forms of transport you would pay more per mile than in a rural area.”

“Our main message to the Government is they need to get the right people around the table. We’d love to be involved and they need to get stakeholders from across the motoring industry involved to create a system that actually works.”

Green Party leader Eamon Ryan said the Government’s focus should be on promoting greater use of electric cars, public transport and car sharing rather than fears of not raising adequate motor revenue.

Speaking on RTÉ’s Today with Miriam show, Mr Ryan said funding should be shifted from roads to public transport and that greater incentives for electric cars were needed in the upcoming budget.

“People are driving more and we need to change our entire traffic system,” he said. “That has to change.”