Mr. Eoin Gavin:

I thank the Cathaoirleach and committee members for inviting the Irish Road Haulage Association to outline our pre-budget submission regarding heavy goods vehicle road tax. Road haulage is a key industry in Ireland as it has facilitated our export-led recovery. However, the costs of operating a truck in the Republic of Ireland are now greatly out of line with Britain, Northern Ireland and numerous other EU member states.

As a result of the ever-increasing costs, Irish international haulage operators are registering or reflagging their commercial fleet in other European countries where operating costs are far more favourable and, consequently, Irish national hauliers are unable to compete with their Northern Ireland counterparts. Up to 2,000 trucks have already left the Irish system with many more considering a similar effort in the new year.

An international truck transporting into Europe will turn over an average of €5,000 per week with 90% of that turnover injected back into the local Irish economy. Some 20% of that turnover is direct taxation, through VAT, PRSI, road tax, insurance levies and vehicle testing and enforcement. However, one primary issue at the heart of all this is the cost of taxing a heavy goods vehicle. A 44-tonne articulated truck costs €4,000 to tax in the Republic of Ireland versus £650 to tax north of the Border in Newry. It is unsustainable for any Irish haulage business to compete with those levels of road taxation.

In light of this scenario, the Irish Road Haulage Association has made a proposal to the Government for this year's budget. The proposal would bring a simple situation for taxing vehicles as applies in other European countries including the UK. Taxing a HGV should cost €750 for vehicles up 18 tonnes, €1,000 for vehicles up to 38 tonnes, and €1,250 for the larger HGV of 44 tonnes or 46 tonnes. This would bring our commercial vehicle road tax in line with our European counterparts and as a result greatly facilitate a competitive platform for our national fleet.

We are not naive about our proposal. It would cost the Exchequer €20 million initially. However, if 400 trucks reregister in Ireland, which had previously reregistered outside the state, the cost of €20 million would be covered by the taxes the repatriated vehicles would contribute to the Irish Exchequer. In addition, we propose the implementation of a pay-as-you-go road charging mechanism. Last year the Irish Road Haulage Association did a survey at our borders and ports of foreign vehicles entering our roads every day. A charge of €10 per day would net the Irish economy €23 million. In order to implement such a pay-as-you-go system, the current road tax structure needs to change to the three categories I previously outlined.

We also seek the realignment of the road tax across all commercial vehicles. At the moment 300,000 vehicles pay an average of €330 to €450, many of them vans, some commercial and some non-commercial. With a realignment of all commercial vehicles, bringing the €330 to an average of €400 along with the €750, €1,000 and €1,250 I mentioned earlier, the €20 million would be recouped immediately.

Finally, by way of example of haulage operators moving out of the Republic of Ireland to other jurisdictions, an Irish Road Haulage Association member in Dundalk moved 58 trucks to Liverpool, bringing about a loss of €230,000 to Louth County Council in road tax alone. Another haulier in Limerick recently moved 29 trucks to Holland. We have lost 2,000 vehicles in the national fleet in the past 18 months.

The IRHA projects that up to 5,000 trucks will move out of the Republic of Ireland within the next 12 months if road tax is not brought into line with the rest of Europe, including the UK, leaving the Irish economy completely reliant on foreign vehicles for their transport requirements from this island.