Paschal Donohoe (Dublin Central, Fine Gael)
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I will deal with the different points that were raised. In response to Deputy Mairéad Farrell, some cars that have the lowest possible CO2 emission, which would be in the first band of vehicle registration tax, VRT, are clearly more expensive than the average car, but plenty of cars on the lower bands of VRT, bands 2, 3 and 4, have a very low level of VRT and are not the most expensive cars in the market. When we are designing a structure like this, we need to give the lowest VRT rate to the vehicles that have the lowest emissions. However, other bands have very low levels of VRT for cars which are not the most expensive energy-efficient cars on the market.

Deputy Naughten is correct in stating this is a laboratory test. However, it differs from the other kind of testing that has happened in that it is laboratory testing that more accurately simulates road conditions. I disagree profoundly with the Deputy that this is in any way a three-card trick. This is a method of testing CO2 emissions that is significantly more accurate than the discredited system that preceded it. He asked if we should have a system that relates the VRT rate to the expected CO2 emissions from the vehicle. We have that in the model that is being proposed because the vehicles with the highest emissions have the highest rate of VRT, as the Deputy will know. He is suggesting that we have a VRT model that reflects the actual usage of the car. I am not sure how we could do that with VRT because VRT is charged at point of purchase of the vehicle.

Regarding us having a different system of testing, this will become an EU-wide system of testing as other countries implement the Worldwide Harmonised Light Vehicle Test Procedure, WLTP, system. It would not be feasible or even possible for us to have a non-WLTP testing methodology, particularly as a country that imports cars. We need to have and now have an EU-wide form of testing car emissions. It is, of course, up to us to then decide on how we want to tax based on WLTP, and there are choices regarding the VRT table that is before the Deputy.

This is a significantly more credible way of testing CO2 emissions than what went before it. I have tried to make lower VRT rates applicable across a broader range of vehicles. I am trying to get the balance right between introducing changes that are needed and trying to reflect that this, of course, will cause change in the purchases of vehicles, which in turn will have an effect on car sellers in the State. I think we have the balance right in the measures proposed here.