Budget win for Electric Vehicle drivers

It is hoped the introduction of a dual registration period will help to boost car sales in the second half of the year and address the seasonal aspect of the motoring industry

Electric vehicle drivers were the big winners motoring-wise in Budget 2013, with news that their road tax will be reduced by €40 next year.

However, Budget 2013 revealed tax increases for all other drivers, with 12 new tax bands for cars registered after July 2008 and price rises for older cars.

From January 1, zero emission vehicles will pay a tax rate of €120, down from the current rate of €160.

Increases for post-July 2008 registered cars range from €10 to €92, depending on the level of emissions, and increases of between €14 and €126 will apply to older vehicles.

A revised VRT tax bands system will be introduced on January 1, 2013 which will have an effect on the price of new cars.

Licence and Registration
Finance Minister Michael Noonan also confirmed the introduction of a dual registration period, meaning that a Dublin car registered in the first six months of the year will carry a 131 D number plate, while a Dublin car registered in the second six months of the year will carry a 132 D plate.

It is hoped that this measure will boost car sales in the second half of the year, which traditionally is a slow time in the Irish motor industry.

There will be no tax increase in the price of petrol or diesel.

Meanwhile, the new EU plastic card driver licence will be introduced on January 19, and from January 1 the price of a 10-year driver licence will increase to €55. A three-year driver licence, which only applies to the over 60s, will cost €35 and a one-year licence will cost €25.

Responsibility for the driver licence service will be transferred to the Road Safety Authority.

‘Broken promise’
Responding to today’s announcements, Conor Faughnan of the AA welcomed the fuel tax decision, however he said that while there is some justification for raising taxes on new cars, as soon most will fall into the current tax band A, owners of older cars will feel ‘harshly treated’.

He added: ‘For anyone who bought a low-emission car on a low tax promise, this is the day when that promise was broken.

‘It is clearly an act of bad faith affecting over 300,000 motorists who believed the promise and bought a cleaner-greener car in the last four years.’

Meanwhile, The Society of the Irish Motor Industry welcomed the registration plate change – something it had pushed for – but condemned the increases in road tax and VRT.

Director General of Simi, Alan Nolan said: ‘The motorist is already paying enough tax to be on the road and new car sales are down 10,000 on last year.

‘The Budget VRT increases should deliver about €50million but this amount could be generated from the sale of just 6,000 extra cars and this would also support 800 extra jobs which would save the Government almost €20million.’

‘Cash cow’
Echoing the Simi’s reaction, car manufacturers also expressed dismay at the tax increases.

Volkswagen Group Ireland Managing Director Simon Elliott said: ‘It is a shame that the motor business here in Ireland again appears to be seen as something of a cash cow and that the Government is again seeking to drain more revenue from the beleaguered motorist.’

Meanwhile, Managing Director of Ford Ireland, Eddie Murphy said the tax increases were ‘short sighted’ and said that motorists have ‘again been targeted for disproportionate extra cost’.

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