Enda Kenny (Mayo, Fine Gael) | Oireachtas source

Introducing banding between 80 g and 120 g of CO2 per kilometre allows us to strengthen the environmental incentive to lower emissions cars while addressing the fiscal gap. The increase for the lowest band, the new band A1 below 80 g, is the lowest of any increase in motor tax, and the rates of increase up to band A3 at 110 g are below the average applied to the CO2 tax structure. This continues the message, in place since 2008, that lower emissions vehicles will attract the lower rates of motor tax.

Splitting the B band into two 10 g bands allows us to differentiate the tax increase to favour lower emission vehicles within this band also. While the percentage increases for the higher bands are lower, the monetary increases for bands D to G are greater than the monetary increases applying to bands A to C.

The restructuring of motor tax represents a continuing commitment to incentivise vehicles with lower emissions. The new bands below 120 g will allow this process to continue into the future. It is anticipated that the proposed increases this year will raise some €86.5 million for the Exchequer over a full year.

The Minister for the Environment, Community and Local Government will shortly bring forward a Bill to close off the arrangement whereby a vehicle owner can declare retrospectively that his or her vehicle was off the road. Provision will be made for a declaration to be made that a vehicle will be taken off the road. This change is designed to close off a loophole that disadvantages compliant taxpayers and is expected to bring in an additional €31.5 million in 2013, bringing the expected yield for 2013 to €118 million.

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