Caít Keane (Fine Gael) | Oireachtas source

I welcome the Minister of State and the Bill. The closure of a loophole that costs the State in excess of €55 million per annum must be welcomed. We all abhor tax avoidance and loopholes. This solves a problem and I congratulate the Minister for bringing it forward. 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 and that will not change. 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 Bill is aimed at stamping out this tax evasion and closing off a loophole that has been there for too long.

However, I do have a few small issues with the Bill that would affect a small number of vintage car enthusiasts. Their hobby is threatened by aspects of the Bill and a small number of changes would make a big difference in this respect. The implementation period is three months. I do not know if every vintage car owner in the country or possibly people who do not know they have a vintage car would be aware of this. In his statement, the Minister of State spoke about publicising it. Is three months too short? Perhaps the Minister of State would look at extending the period or making sure an extensive educational campaign is undertaken to ensure that everybody with cars sitting around are aware of it.

Many people buy vehicles for future restoration as they become available. More often than not, there is not an immediate change of ownership. Section 7(9) of the proposed Bill requires the person seeking the declaration to be the registered owner of the vehicle. To fulfil this, the vintage enthusiast may need more than three months. Sometimes, change of ownership of a vintage car is not as straightforward as buying a new car. Could the Minister of State look at changing the time period from three to six months? A large number of enthusiasts will have emigrated in the recent past and put their cars in storage. It may be difficult for them to get everything sorted in the short time frame if the car is locked up. I am only talking about classified vintage cars. There are many forgotten classics in barns and sheds all over Ireland. Some Members may know of relations who put the car in the shed and forgot about it. It turned out to be a very valuable car, the elderly owner died and the car is now in the stewardship of a family member who does not know it is a vintage classic or a valuable car. The Bill may be enacted without them realising this so the three-month period could easily pass them by unnoticed. All those owners wish to be compliant with the law but through default, they might find themselves with a huge bill for arrears.

Under the current proposal, the declaration will have to be made annually. The Bill does not state how this will occur. Will local authorities, or some other body, have to contact the vehicle owner annually to remind them? If so, will this place a large cost on the State? It is also dependent on the owner resubmitting the declaration. I suggest that serious consideration be given to putting the onus on the owner to make the declaration that the car will be off the road until such time as the owner wishes to put it back on the road rather than having the State follow up on an annual declaration. How will it be followed up? This approach has been implemented in the UK version of this system since early 2013. The statutory off-road notification has been in operation in the UK for many years and has proven to be a successful model to take lessons from. This move to an off-the-road declaration for life rather than on an annual basis would no doubt save millions in administration costs and make the system more workable for the reasons below because there are administration costs for licensing authorities, which will probably be the local authorities. If they must follow it up, it will cost money. Vehicle owners will not be able to say they forgot to renew the declaration or they did not realise it had expired. There is no excuse for them not doing it. There is no onus on the vehicle owner to remember to do this annually. There is no loss in revenue to the State or local authority as there is currently no charge for the declaration. A declaration for life will not affect the implementation of the Bill in any way and will make management and enforcement of the Bill much easier. The majority of vintage car owners' cars are off the road for periods far longer than a year. The Minister of State referred to cars that were off the road for long periods of time.

With regard to arrears and fines, I agree that it is only right and fair that there are strict and heavy fines for people not abiding by the laws of the State. There is an issue with charging arrears that will affect the hobby of vintage owners. As regards arrears for vintage cars stored in sheds, the owner might decide to scrap the vehicle rather than pay the arrears. One could lose a good classic vintage car that way. We could end up with a situation where there would be no vintage cars or very few on the road. What happens if it comes to light after 20 or 50 years? They are a much sought after commodity on the open market so could the Minister of State see how it could be dealt with? Is there a special case for vintage car owners or registered vintage car owners?

While under the current proposal, there is no administration charge, there is provision for one to be added in the future, with certain exemptions. In the explanatory memorandum published alongside the Bill, it states that cars with an annual tax rate of under €119 will be exempt from possible administration charges. This gives rise to a number of issues. It is not clearly outlined in the explanatory memorandum or the Bill and no figure is mentioned. This may be changed due to its connection to other sections of other Bills. Would cars eligible under the vintage tax rate be exempt from this charge? Has the Minister of State considered this administration fee for vintage car owners or an exemption for vintage cars?

I acknowledge the role of An Garda Síochána in enforcing the law in this area. It issues and collects the fixed penalties for failure to update 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 for 2012, the number of Garda-witnessed off-the-road declarations increased by 40% in the period from 2008 to 2011. During the 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.

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.

What does that tell the Minister? However, payment covered the 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.

There is clearly a need to undertake measures to stop motorists from evading motor tax by retrospectively declaring that their vehicles were off the road. It costs the taxpayer more than €55 million per annum and it is hard to find fault with the rationale behind a law that will close a loophole that allows people to do this. I support the Bill and its passage through the House. I ask the Minister of State to take into consideration the issues I raised in respect of the vintage car owners and the culture surrounding that hobby and the administration of the tax involved including the arrears and fines.