Seán Kenny (Dublin North East, Labour) | Oireachtas source

The primary purpose of the Bill is to provide for a prospective system of declaring vehicles off the road for motor tax purposes, closing a loophole whereby owners can declare retrospectively that a vehicle has not been in use on the public road, which is unverifiable. This Bill will replace the current system whereby owners declare a vehicle off the road retrospectively when seeking to tax a vehicle where there are arrears of tax outstanding.

Where owners tell the motor tax authorities they intend to keep their vehicle off the road for a period, they will not be liable for motor tax. This closes off the existing tax evasion loophole, where owners are able to make a declaration at their local Garda station stating that their car was off the road and avoid payment of arrears of motor tax.

I welcome the fact the Government is putting an end to this, and compliant taxpayers will welcome this move as well. Up to €55 million per annum is not collected currently through this form of tax evasion by people not paying their motor tax. I am confident the vast majority of motorists will welcome the tackling of those who are evading motor tax and not paying their fair share. This is a simple change in the rules governing motor tax for vehicles not being used on the road from time to time.

There are many valid reasons a person may wish to put their car off the road for a while, such as working abroad for a time, and they will be facilitated so long as they let their motor tax office know in advance. There will be no change in the rules for those who pay their motor tax on time, or those who end up paying arrears where they let their motor tax slip from time to time. This is especially important in the current economic environment. We need to give people a little breathing space. What this legislation is targeting is the persistent evader - those who abuse the system and evade paying their motor tax altogether.

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 and 12 calendar months.

The forms can be submitted initially via motor tax offices and will be available via Motor Tax Online later in the year. 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. The new declaration will not require vehicle owners to make a declaration in a Garda station, as is the case with the current retrospective declarations. I welcome that.

There will be a three-month transitional period to the new system. During this time, those in arrears must pay the arrears and either take out a vehicle licence or make a prospective declaration of non-use. Those whose vehicles have not been on the road must make a retrospective declaration and either take out a vehicle licence or make a prospective declaration of non-use. Following the end of the transition period, only a prospective declaration of non-use can be made. Those who fall into arrears of motor tax will not be able to make a prospective declaration - rather, the arrears and a minimum of three months' motor tax will be payable before a vehicle can be declared off the road.

In addition to the recommendation in the local government efficiency review group report, the 2011 Annual Report of the Comptroller and Auditor General also contained a chapter highlighting the level of motor tax evasion and recommending that a more robust system be put in place to deal with off-the-road vehicles. It is estimated that the measures could yield up to €50 million in a full year and I am pleased the Government is taking action.

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