Michael McGrath (Cork South Central, Fianna Fail)
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I move amendment No. 1:

In page 3, between lines 10 and 11, to insert the following: “Amendment of section 121 of Taxes Consolidation Act 1997

1.Section 121 of the Taxes Consolidation Act 1997 is amended in subsection (4A)—

(a) in paragraph (aa)(i), by the insertion of “subject to paragraph (ab),” before “€35,000”,

(b) by the insertion of the following paragraph after paragraph (aa):

“(ab) Notwithstanding paragraph (a), the cash equivalent of the benefit of a car ascertained under paragraph (a), for the year of assessment 2023, shall—

(i) where paragraph (aa)(i) applies, be computed on the original market value of the car reduced by—

(I) the amount specified in paragraph (aa)(i), and

(II) €10,000,

and

(ii) where subparagraph (ab)(i) does not apply, for the vehicle categories A, B, C and D set out in column (1) of Table B to this subsection, be computed on the original market value of the car reduced by €10,000.”,

and

(c) by the insertion of the following paragraph after paragraph (b):

“(ba) For the year of assessment 2023, Table A to this subsection shall apply as if—

(i) the lower limit of “52,001” shown in column (1) were replaced by “48,001”, and

(ii) the upper limit of “52,000” shown in column (2) were replaced by “48,000”.”.

I thank the Cathaoirleach and his colleagues for facilitating the taking of Committee Stage of the Bill. I will deal with amendments Nos. 1 and 2, which are being taken together, I will make some points for the record and then I will engage with Members.

These sections amend sections 121 and 121a of the Taxes Consolidation Act 1997 by providing for the recently-announced changes to the vehicle benefit-in-kind, BIK, calculation. The Government remains committed to the environmental rationale behind the current emissions-based vehicle BIK regime, which has been in operation since 1 January 2023. In the current inflationary context, however, the Government recognises the difficulty experienced by some people facing BIK increases under the new regime. To that end, I am making temporary changes to BIK for the current year, which will help to mitigate some of the increases associated with the new emissions-based calculation.

The amendments provide for the application of a universal relief of €10,000 on the original market value, OMV, of a vehicle in categories A to D, inclusive, in order to reduce the amount of BIK payable. This will also apply to vans and electric vehicles; however, it will not apply to cars in emissions category E, the highest emissions category. For electric vehicles, the OMV deduction of €10,000 will be in addition to the existing relief of €35,000 available for such vehicles. This means the total relief for 2023 will be €45,000. In addition, the lower mileage limit in the highest mileage band, which is currently 52,001 km, will be reduced by 4,000 km with the highest mileage band now entered into at 48,001 km. All measures will be backdated to 1 January 2023 and will remain in place until the end of the year.