The Irish Times view on motor tax: targeting high-emitters

Car dealers and distributors now have 12 weeks to offload their stock of unregistered new high-emissions cars before prices go up

The timing of changes to the motor tax regime drew comparisons with the last time it was overhauled back in 2008. Yet this time the changes are driven by international moves. Photograph: Leah Farrell / RollingNews.ie

The timing of changes to the motor tax regime drew comparisons with the last time it was overhauled back in 2008. Yet this time the changes are driven by international moves. Photograph: Leah Farrell / RollingNews.ie

 

The Government decided to go on a spending spree in some areas this week. Yet for motorists, it seemed to be another punitive budget with increased fuel prices and an average of €1,000 added to the price of new cars. The timing of changes to the motor tax regime drew comparisons with the last time it was overhauled back in 2008. Yet this time the changes are driven by international moves. Ireland has to adapt its motor tax regime to reflect new CO2 emissions testing regulations.

The trouble for the motor industry is that for all the outcry over the timing of the changes, the root of this particular upheaval is not entirely driven by the need to address global warming or exchequer concerns over falling tax revenues. Certainly both played a part: politicians are eager to see greater adoption of electric cars and a reduction in transport emissions, while Revenue officials are keen to retain tax income from motorists.

But the real instigator of these changes dates back to 2015 when it was discovered that some car brands were cheating official emissions tests. Criminal proceedings are underway, and compensation to affected owners in several countries has been paid. However, the long-term damage from the “dieselgate” scandal is that it destroyed trust between officials and the auto industry, thereby accelerating plans for a new emissions testing system that assigns to cars CO2 figures which more closely reflect reality. Given that most EU countries base their tax regimes on these emissions figures, it was inevitably going to require changes to motor tax bands.

By approaching these changes with an eye to driving the environmental agenda, the Government is rightly targeting the purchase of new higher emitting vehicles, while leaving the motor tax on cars currently on the road largely unchanged.

For car dealers and distributors it means they now have 12 weeks to offload their stock of unregistered new high-emissions cars before prices go up. It may also make consumers call time on the current SUV crossover craze and opt instead for more efficient, smaller models.

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