Tony McLoughlin (Sligo-North Leitrim, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on this Bill which is estimated will save taxpayers €55 million in one year. The practice of motorists declaring that their vehicles were off the road for a period of time, filling in the relevant form, going to the Garda station and getting it stamped and proceeding to the local motor tax office has been well known for many years and has been used by people whose vehicles were genuinely off the road. An example is a civil servant or semi-State worker who took up an offer outside the State for a period of time, who parked his or her vehicle and returned to find the tax was out of date and legitimately went through the process of declaration that his or her car was off the road. Other examples include persons with illnesses for a period of time or persons acquiring a company vehicle or van for a period of time to do specialised work. It is important to mention that under this Bill, all the cases I mentioned will continue to be able to do the same if they declare their circumstances in advance. I welcome the Minister's due recognition in the Bill of these circumstances.

What the Bill is designed to do is to catch the people who set out to avoid their obligation to pay motor tax on their vehicles. It is impossible to believe that up to €55 million in tax is written off genuinely. There are people who drive around for up to 12 months or longer and suddenly get a scare when they come across a checkpoint. They then go to regularise their situation. They decide to fill in the declaration falsely by ignoring the non-tax period and just paying for the next six-month to 12-month period. Why should compliant citizens subsidise others? It is not fair and the Minister has an obligation to act to tighten up the regulations.

Once the Bill is enacted, a non-use declaration can be made in advance of the vehicle being taken off the road for a period of between three to 12 calendar months. A declaration can be made up to one month in advance of the expiry of a motor tax disc or a previous declaration of non-use while purchasers of new and second-hand vehicles will have ten days from the date of registration or change of ownership to make a declaration. These are all very practical ways of doing business and I welcome the Minister's well thought out proposals in the Bill.

I suggest that the Department of the Environment, Community and Local Government engages with representatives of the motor industry so that vehicles which are traded in or sold in part exchange to dealers are dealt with through this Bill. Some vehicles could technically be in a motor dealer's yard for up to nine months, unsold. Will vehicles traded by a customer have to file a non-use declaration in advance of the vehicle being taken off the road? When the timeframe is not known, what is the procedure? I urge the Minister to provide clarifications in this regard.

Since 2008 car tax has been aligned to CO2 emissions rather than the cc of the engine which has resulted in massive savings for the motorist. This was introduced by a former Minister, John Gormley. Since then car manufacturers have, through innovation and technology, further reduced the CO2 emissions of many engines, resulting in leaner fuel consumption, cleaner air and reduced costs in terms of car purchase costs, fuel and motor tax.

The Society of the Irish Motor Industry has argued against any subsequent motor tax rises, but it is worth noting that in 2008 the motor tax on an average 2-litre diesel-engine car was over €650. The new tax, based on bands in the CO2, category resulted in these same vehicles paying €150 and, in some cases, just over €100. This represented a reduction of 77% in the cost of taxing such a vehicle. I remind Members again of the start of the economic collapse in 2008. While a reduction in motor tax is welcome to encourage people to drive cars with lower emissions, effecting a reduction in the order of 77% was over-generous and resulted in the fund nose-diving, further adding to the reduction in general tax revenue in Ireland when we most needed it.

The average motor tax charge is now in the region of €250. As the years pass, the pre-2008 high-tax vehicles will slowly disappear so that taxing one's motor car will become more affordable than before when the average premium was in the region of €500. I urge the Minister to bear this in mind to ensure we will not go back to those days when simple, basic small vehicles were taxed beyond the capacity to pay of the ordinary motorist.

I do not suggest that the larger fuel-thirsty vehicles should avoid heavy duties but I feel tax on average-sized diesel vehicles driven by the average person should not rise very much over the present level. We have seen increases since 2008 in the order of 45%. Keeping the lower CO2 tax bands at reasonable levels will reduce motor tax avoidance in accordance with the Minister's ambition alongside closing off the loophole resulting in the misuse of the non-use declaration form. I commend this Bill to the House.

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