Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

This amendment to the Finance (Excise Duties) (Vehicles) Act 1952 addresses two matters which have come to my attention regarding motor tax. The first relates to State-owned vehicles. State-owned vehicles are exempt from motor tax, and almost 6,000 vehicles are exempt in this way by virtue of being State-owned. Over half of these are Garda vehicles. There are also a significant number of vehicles owned by the Defence Forces, Civil Defence, the Office of Public Works, the Office of the Revenue Commissioners, the National Parks and Wildlife Service, under the auspices of the Department of Housing, Local Government and Heritage, and the Department of Agriculture, Food and the Marine, and the Department of Transport. The exemption also applies to a small number of vehicles held by State agencies.

I understand, based on legal advice, that it is prudent to amend the legislation to provide a modernised basis for this exemption. I am therefore proposing to amend the Finance (Excise Duties) (Vehicles) Act 1952 to add State-owned vehicles to the list of exemptions from motor tax provided under section 1 of that Act, and also to allow for the exemption to be extended to vehicles owned by such State agencies as may be prescribed in regulations, having regard to the level to which they are funded by the State.

The second matter dealt with in this amendment is the amendment of Part I of the Schedule to the 1952 Act to remove the word “large” from the reference to a public service vehicle. In the early 1990s, a concessionary rate of motor tax was introduced for school buses. In order to qualify for the concession, which carries an annual rate of tax of €95, a vehicle must be a large public service vehicle within the meaning of the Road Traffic Act 1961, that is, it must have more than eight seats, excluding the driver’s seat, and must be used exclusively for school transport or for transport to and from school-related physical education activities. The vehicle must either be licensed under article 60 of the Road Traffic (Public Service Vehicles) Regulations 1963 or be owned by a statutory transport undertaking. In the former case, it is usually referred to as an Article 60 licence.

An Article 60 licence is issued by An Garda Síochána where it is deemed that there is a need for the provision of a school transport service. Over the years, the owners of some passenger vehicles with eight seats or fewer have been issued with an Article 60 licence. These are vehicles used particularly in remote rural areas where transport is not always easy to obtain. As they have an Article 60 licence, these vehicles have traditionally been given the concessionary tax rate. However, it has come to our attention that this is not strictly correct, given that the vehicles are not large public service vehicles. This has sometimes resulted in operators being charged motor tax at private rates, which can go up to €2,400 annually. I understand that this is causing financial hardship and may impact on the continued provision of such services. The result would be a loss of service in some areas, particularly rural areas, where alternatives are not readily available.

I am, therefore, proposing to delete the word "large" in the appropriate place, so that the services in question which use smaller vehicles will be able to benefit from the exemption. In the interim, my Department has issued a circular to all authorities advising that the rate can continue to be given to these vehicles, pending a legislative amendment being put in place.