Noel Ahern (Dublin North West, Fianna Fail)

I am taking this matter on behalf of my colleague, the Minister for the Environment, Heritage and Local Government. The raising of this issue provides an opportunity to outline to the House the initiatives which have been introduced to combat motor tax evasion. The administration of the motor tax service has been improved substantially in recent years with the implementation of the national vehicle and driver computer system, NVDF, which facilitates real-time transaction processing by all the motor tax outlets throughout the country. Data from the NVDF are supplied to the Garda Síochána for motor tax enforcement purposes.

The NVDF has also facilitated the introduction of customer-focused initiatives such as on-line motor tax renewal and the taxing of new vehicles for the first time over the Internet. This initiative has been received very favourably by the motoring public. The statistics show that over 30% of all motorists eligible to do so pay their motor tax on-line, with a 50% take-up in Dublin. The taxation system is now more efficient and accessible and local motor tax offices can effect a faster turnaround of tax applications submitted to them.

In the year to the end of September 2006, motor tax receipts show a 10% increase as against the same period in 2005. As this 10% is significantly greater than the increase in the national vehicle fleet, which amounts to 6%, and bearing in mind that there was no increase in motor tax rates for the period in question, it suggests a very positive performance in terms of motor tax compliance. This is very much influenced by high profile Garda enforcement, particularly in recent times through the operation of the traffic corps in various road traffic and safety initiatives. The increased levels of enforcement are also reflected in the increased levels of payment of motor tax arrears. In the year to the end of September 2006 almost €19 million was collected, representing an increase of almost 11% over the same period in 2005.

The last survey on motor tax compliance dating from 2001, as mentioned by Deputy O'Dowd, estimated a persistent evasion level of 4.6%, that is, the percentage of vehicles never taxed. An evasion level of 4.6% equates to a revenue loss of €40 million in current terms. However, as I have indicated, we feel the current position is significantly better.

Some measures that have been introduced or are in the pipeline contribute in themselves to enforcement of motor tax obligations. For instance, the Garda may impound vehicles in respect of which motor tax has not been paid. The recent Road Traffic Act reduced the period of non-payment from three to two continuous months. Other enforcement initiatives are being developed by us in consultation with the Garda.

Follow-up action by the Department in conjunction with local motor tax offices has taken place in regard to under-declarations of weight for heavy goods vehicles, in particular articulated tractor units and their drawing components. The NVDF analysis indicates that an additional €1.1 million in motor tax was collected in the past year and this should be realised for each future year. It is proposed to issue reminder tax notices and follow up owners of new vehicles which remain untaxed after they have been registered with the Revenue Commissioners.

To facilitate earlier taxation following the change of ownership of vehicles, we are introducing a system whereby approved motor dealers may notify ownership changes in respect of vehicles purchased and sold by them over the Internet. This e-government project is in progress and will be operational in July or August 2007.

Arrangements have been made to issue motor tax renewal and reminder notices earlier to facilitate earlier taxing, and to reduce the period of "grace" whereby motor tax renewal applications are tolerated for up to a month after the disc expires.

We are also taking action to reduce the incidence of "non-use" declarations in support of a period where motor tax has not been paid, commonly referred to as "gapping".

I am grateful for this opportunity to inform the House about the manner in which we are tackling motor tax evasion and the evidence of success we are already achieving in this important area.

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