Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

The primary purpose of the Bill is to provide for a system of declaring vehicles off the road for motor tax purposes in advance, closing a tax evasion loophole, whereby owners can declare, retrospectively, that a vehicle has not been in use on the public road, which is unverifiable. It is estimated that the cost of this loophole is in the order of €55 million per annum. The new arrangement for making off-road declarations in advance will make no difference to those maintaining their vehicles on the road and paying tax correctly and will only require those planning to take their vehicle off the road to notify this fact in advance rather than retrospectively. The Bill also provides for transitional financial arrangements, following the transfer of the driving licence function from the licensing authorities to the Road Safety Authority.

Motor tax is payable on most vehicles used in public places. Approximately €1 billion is paid into the local government fund from motor tax each year. The motor tax evasion rate has been estimated at approximately 5%. Currently, it is possible to claim back motor tax if more than three months remain on the tax certificate and a declaration is made that a vehicle will be off the road for a certain period. If motor tax has lapsed and a period elapses prior to renewal, it is possible to declare the vehicle off the road for that period and thus avoid paying tax for the period. The making of a declaration is not verified. Evidence shows there is a problem with false off the road declarations being made with a consequent loss to Revenue. Since 2010, only 160 cases have been taken in respect of the offence of making a false motor tax declaration.

The motor tax system is administered and enforced by a number of organisations. The Office of the Revenue Commissioners is responsible for the registration of vehicles. The Department of the Environment, Community and Local Government is responsible for motor tax policy. The Department of Transport, Tourism and Sport is responsible for the online collection of motor tax as well as maintaining the national vehicle and driver file, NVDF. The NVDF is a database which contains details of all registered vehicles and their owners as well as all licensed drivers in the State. It also provides the basis for a number of other services, including online motor tax, change of vehicle ownership, motor tax, driving licence renewal, vehicle registration certificates and penalty points.

The Garda Síochána also enforces the legislation. It issues and collects the fixed penalties for failure to up-date tax discs and initiate prosecutions where fixed charges are not paid. The Courts Service is responsible for the collection and processing of fines in respect of motor tax offences. According to the Comptroller and Auditor General's report 2012, the number of Garda witnessed off-the-road declarations increased by 40% in the period 2008 to 2011. During this period more than 1.1 million off the road exemption gaps were declared, with a total value of more than €226 million. While a substantial proportion of declarations made are probably legitimate, it is also likely that some are not.

The role of the Garda is simply to witness the signature, not to confirm that the vehicle was off the road for the declared period of time.

The 2012 figures from the Comptroller and Auditor General show that half of the non-taxed vehicles recorded using the M50 were taxed three months later. However, payment covered this travel period recorded in less than half of these cases. More than 5,000 individuals who renewed their motor tax made a declaration that their vehicle was off the road although that vehicle had been recorded on the M50. Between 2008 and 2011, more than 185,000 fixed penalty notices were issued for failure to display an up to date tax disc. Approximately 145,000 of these vehicles were later taxed.

The Bill may have a positive impact on Ireland's EU environmental obligations. From 2006, there has been an obligation on vehicle owners who are scrapping a car to deposit same at an authorised treatment facility for appropriate treatment and recover. Failure to do so is an offence under the waste management end of life vehicles regulations 2006. Under the new system owners are more likely to go to legitimate waste operators when scrapping their cars as they will have evidence that the car has been destroyed.

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