Alan Kelly (Tipperary North, Labour) | Oireachtas source

I move: "That the Bill be now read a Second Time".

I am pleased to open the debate in the Dáil on the Motor Vehicles (Duties and Licences) Bill 2015. In light of the importance of the haulage industry to our export-led growth and to ensure Ireland remains competitive, it was announced in the 2016 budget that the rates of commercial motor tax on larger goods vehicles were to be reduced. The main purpose of the Bill is to give legislative effect to those reductions. The reductions, to apply to all goods vehicles with an unladen weight exceeding 4,000 kg, will take effect for vehicle licences taken out with a commencement date of 1 January 2016.

The current structure for goods vehicles has 20 rate bands ranging from the lowest rate for electric vehicles of €92 to €5,195 annually for the heaviest goods vehicles. As well as reducing the rates for all goods vehicles, the rate structure is also being simplified. From January, there will be just five bands of motor tax which will range from the current level of €92 per annum for electric goods vehicles up to a top rate of €900 per annum for all goods vehicles in excess of 12,000 kg. The reductions are tapered, from a reduction of €4,295 for the heaviest goods vehicle band to a reduction of €43 annually for vehicles weighing between 4,001 and 5,000 kg. There are no changes to the lowest two bands, which remain at €333 and €420, respectively.

This change will benefit the owners of some 29,000 goods vehicles. The higher rates that apply in Ireland by comparison to those in the UK, along with the introduction of road user charging in that jurisdiction, have caused a distortion and have led to comparatively higher costs for Irish-based hauliers. The changes provided for in this Bill go some way towards redressing the imbalance. I am sure they will be welcomed by everyone in this House. This is an interim measure, pending the replacement of the current basis of taxation for goods vehicles on unladen weight. This system is out of line with the basis of taxation in other countries. Consideration is being given to replacing it with a fairer system of calculation based on gross design vehicle weight. There are no changes to motor tax rates for any other category of vehicle. The annual cost of all of these reductions is estimated to be €43 million.

The Bill before the House also proposes to make further amendments to existing goods vehicles legislation. On 21 October last, just over a week after the announcement of the budget reductions, a Court of Appeal judgment stated that the practice of weighing an articulated vehicle with the heaviest unladen trailer was not adequately provided for in law and that only the mechanically propelled element of the vehicle, which is commonly referred to as the tractor unit, was liable for motor tax. The judgment further provided that such vehicles, of which there are some 10,600 in the fleet, fall to be taxed under Part I, paragraph (4)(d), of the Schedule to the Finance (Excise Duties) (Vehicles) Act 1952. This is the rate for non-agricultural tractors and is currently set at €333 per annum. Prior to the judgment, Part I, paragraph (5), of the Schedule to the 1952 Act, which contains the rates for goods vehicles, applied. Following receipt of the judgment, the necessary technical adjustments to charge motor tax on such vehicles at the tractor rate of €333 have been made to the national vehicle and driver file. Rigid goods vehicles continue to pay tax at the goods rate and are not affected by the Court of Appeal judgment. The judgment stated that "if it is indeed the view of the Oireachtas that the owners of such tractors should pay an excise duty based on the weight of the trailer being hauled by the tractor, then new legislation will be required to make that intention clear." On that basis, this Bill contains not only provisions to give effect to the rate changes announced in the budget, but also provisions to bring articulated goods vehicles within the scope of paragraph 1(5) of the 1952 Act - the goods category. This is an equitable approach as it means that all goods vehicles, articulated or not, will be treated in the same way for motor tax purposes.

I will turn now to the provisions of this relatively short Bill, which contains six sections. Section 1 sets out the definitions contained in the Bill. Section 2 provides for the new rates for goods vehicles to apply to motor tax discs with a commencement of 1 January 2016 or thereafter. Section 1 of the 1952 Act provides for duties of excise to be charged, levied and paid on mechanically propelled vehicles being used in a public place. Section 3 of this Bill inserts a new subsection into section 1 of the 1952 Act to provide that, in the case of goods vehicles, a mechanically propelled vehicle means the vehicle inclusive of the additions provided for in the Finance (Excise Duties) (Vehicles) (Amendment) Act 1960. The current additions contained in the latter Act are a body, a part, a fitting or a receptacle. Later sections of the Bill will provide for semi-trailers, which are the drawn components of articulated trucks, and trailers to be included as additions. Section 4(1) excludes tractor units from the non-agricultural tractor category and provides, in paragraph 5 of Part I of the Schedule to the 1952 Act, which is the goods category, for the unladen weight of goods vehicles to include the additions provided in the 1960 Act. Section 4(2) provides for the new rates for goods vehicles announced in the budget. Section 4(3) provides for the insertion of relevant definitions in the Schedule to the 1952 Act and deletes a subparagraph that is no longer of relevance. Section 5(1) inserts definitions in section 1 of the 1960 Act that are relevant to amendments being made to that Act. Section 5(2) provides for semi-trailers and trailers to be included as additions in the 1960 Act. Section 5(3) provides for semi-trailers and trailers to be included as additions in the enforcement provisions of the 1960 Act. The final section, section 6, provides for the Short Title.

The purpose of this short Bill is to give permanent legal standing to the motor tax decreases announced in budget 2016, which were discussed on the floor of this House on numerous occasions. The additional amendments are intended to bring articulated goods vehicles back into the category under which they were taxed prior to the Court of Appeal judgment. I commend the Bill to the House.

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