Ann Phelan (Carlow-Kilkenny, Labour) | Oireachtas source

I am pleased to open the debate 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 that Ireland remains competitive, it was announced in budget 2016 that the rates of commercial motor tax on larger goods vehicles would be reduced. The main purpose of the Bill is to give legislative effect to those reductions. The reductions, which will apply to all goods vehicles with an unladen weight exceeding 4,000 kg, will take effect for vehicle licences with a commencement date of 1 January 2016 or later.

The current structure for goods vehicles has 20 rate bands, ranging from the lowest rate of €92 for electric vehicles to €5,195 annually for the heaviest goods vehicles. As well as the reduction in rates for all goods vehicles, the rate structure is being simplified. From January there will be only five bands of motor tax, ranging from the current level of €92 per annum for electric goods vehicles 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 kg and 5,000 kg. There are no changes to the lowest two bands, which remain at €333 and €420, respectively.

The change will benefit the owners of some 29,000 goods vehicles. The higher rates that apply in Ireland by comparison to those in the United Kingdom, along with the introduction of road user charging in that jurisdiction, have cause a distortion and led to comparatively higher costs for Irish-based hauliers. The changes provided for in the Bill go some way toward redressing the imbalance.

This is an interim measure pending the replacement of the current basis of taxation for goods vehicles, which is unladen weight. The system is out of line with the basis of taxation in other countries. Replacing it with a fairer system of calculation based on gross design vehicle weight is under consideration.

There are no changes to motor tax rates for any other category of vehicle. The total cost of the reductions is estimated at €43 million annually.

The Bill also contains further amendments to the legislation relating to goods vehicles. On 21 October 2015, a little over a week after the announcement of the budget reductions, a Court of Appeal judgment stated that the practice of weighing an articulated vehicle on the basis of the heaviest unladen trailer was not adequately provided for in law, and that only the mechanically propelled element of the vehicle - what is commonly referred to as the tractor unit - was liable for motor tax.The judgment further provided that such vehicles, of which there are more than 10,600 in the fleet, fall to be taxed under paragraph 14D of the Schedule to the Finance (Excise Duties) (Vehicles) Act 1952. This is the rate for non-agricultural tractors, which attract an annual rate of €333. Prior to the judgment, paragraph 15 of the Schedule in question, which contains the rates for goods vehicles, applied.

Following receipt of the of the judgment, the necessary technical adjustments to charge motor tax on such vehicles at the tractor rate of €333 have now been made to the national vehicle and driver file. Rigid goods vehicles continue to pay tax at the goods rate and are not impacted 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, new legislation would be required to make that intention clear. On that basis, the Bill in question contains not only provisions to give effect to the rate changes announced in the budget but also provisions to bring articulated goods vehicles back within the scope of paragraph 15 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.

The Bill is relatively short and 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 dates 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 the Bill inserts a new subsection in 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 1960 Act refer to 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 1 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 Act of 1960. 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 the 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. Section 6 provides for the Short Title.

This is a short Bill with the purpose of giving permanent legal standing to the decreases in motor tax announced in budget 2016. The additional amendments are intended to bring articulated goods vehicles back into the category under which they had been taxed prior to the Court of Appeal judgment. I commend the Bill to the House.