Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The existing vehicle tax structures in the State have a strong environmental rationale, with the more pollutant, fossil-fuelled cars paying higher rates of tax, between motor tax, benefit in kind, BIK, vehicle registration tax, VRT, and the nitrogen oxide, NOx, charge. In contrast, low-emission cars and electric vehicles, EVs, are subject to lower rates of tax. I know the Deputy will be aware of it but it I want to emphasise the point that our tax code already recognises the differing contributions that those vehicles make to carbon emissions in our economy and society. The current policy approach aims to incentivise the uptake of zero- to low-emission vehicles, which will help to reduce Ireland’s transport emissions.

A number of tax measures are in place to support the uptake of EVs, including preferential rates of BIK; BIK tapering relief of €35,000 in 2025 to €10,000 in 2027; a BIK exemption where an employer provides a facility for the charging of an EV; VRT relief of up to €5,000; and the introduction of an emissions-based VRT system for light commercial vehicles that will apply from 1 July 2025 in the Finance Act 2024. Other measures are in place such that EVs also benefit from low rates of annual motor tax. New proposals are considered and current vehicle tax policies are kept under review as part of the tax strategy group which is the transparent process we have in place to advise myself and the Government on the taxation options that are available to the Government in advance of the budget, the policy merits and demerits and what the costs of those options would be.

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