Mr. John Martin:

I thank Senator Boylan for those questions. I will start with the concerns expressed around the bike-to-work scheme, which has been very successful. As the Senator rightly points out, it is focused on cycling to work. Therefore, there is a PAYE element to it. As a result, it excludes those who do not work, including children and students, etc. It is something we are looking at. We are also looking at other things in respect of e-bikes or e-cargo bikes, where the bike-to-work scheme does not cut it in terms of the amount of relief it offers. As we lead up to the next round of budget negotiations, essentially we are looking at whether VAT reductions could be applied for certain mobility sales, such as bikes, etc. That would not necessarily involve a deduction of pay at source or of tax at source. Rather, it would be a VAT relief on certain things. That is an area that could be considered in that regard. We would need to work with closely with our colleagues in the Department of Finance on that. However, I reiterate that it is on our radar. We are aware of it and we are looking at it.

SUVs are a complex area. Our existing approach to taxation of motor vehicles is through VRT. It is already designed to encourage a shift to improved emissions performance. Therefore, we are looking at higher taxation on heavier vehicles by default or by proxy. While it is not specifically targeted at SUVs by name, the bigger the cars, the higher emissions they tend to emit and, therefore, the higher the level of tax you pay on them.

We continue to engage with the Department of Finance to look at a range of improvements on the taxation system to try to disincentivise heavier vehicles and higher-emitting vehicles. However, the current focus is on the actions that are in the climate action plan, the sustainable mobility policy and the road safety strategy. We need to be a little careful when we focus on weight alone, or on aerodynamics alone, because we could introduce an increased tax band on EVs as well. This could therefore reduce the attractiveness between an EV and an internal combustion engine. People will just decide to go for a fossil fuel car or, worse still, decide to stick to their existing car, which probably has higher emissions than a new fossil fuel car or an EV. We do not want to force people back into higher-emitting vehicles through a weight-based taxation system. I might hand over to Dr. O’Grady to pick up on the EV implications of that.