Michael Comiskey (Fine Gael)
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I welcome the Minister of State and congratulate him on his appointment. We look forward to working with him in the coming years.

The matter of a tax credit for road hauliers has been brought to my attention by hauliers and others. Those with heavy trucks and other vehicles have to pay a substantial road tax. Last year a law was introduced stipulating that any vehicle off the road must be declared as such, with the declaration to be accompanied by a garda's signature, and that when it was back on the road a garda signed declaration also had to be submitted. This has implications for those who have a truck or other heavy vehicle taxed. I spoke to an individual who had paid €1,800 to have a truck taxed. Unfortunately, he lost the contract on which he was working and the truck was taken off the road, with the effect that his €1,800 was more or less down the drain. Perhaps we might consider a scheme whereby the €1,800 could be held in credit until the truck was put back on the road or the driver received another contract. That would carry the driver forward for another three or four months.

What I propose does not apply so much to smaller vehicles, tractors and other vehicles on which the tax paid is small. However, in the case of a large truck, the tax on which is €1,800 for three months, a lot of money is tied up. Is it possible to receive a tax credit if one’s truck is taken off the road temporarily?

Paudie Coffey (Waterford, Fine Gael)
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I thank the Senator for his kind comments. I look forward to working with him and many colleagues in the House.

I thank the Senator for raising this matter which I am taking on behalf of the Minister, Deputy Alan Kelly. I acknowledge the importance of a healthy and competitive haulage industry to our general economic welfare and employment across all areas of the country.

Changes to the procedures for declaring vehicles off the road came into effect on 1 July 2013. The Non-Use of Motor Vehicles Act 2013 replaced the system whereby a vehicle was declared to be off the road retrospectively, which was unverifiable, and put in place new arrangements to allow motorists to make provision for genuine periods of non-use of a vehicle. For commercial vehicle owners, this could be for anticipated downtime or due to cyclical business demand.

The arrangements for off-road declarations only allow for a future declaration. It must be made in advance of the vehicle being taken off the road, in the month before tax falls due or when a previously made declaration of non-use expires. The declaration of non-use can be made at any time during that month, for free, online or at a motor tax office. An owner can return the vehicle to the road early if circumstances such as an increase in trade require it simply by taxing the vehicle, effective from the first day of the month in which it is taxed. As the taxation period which can be three, six or 12 months is due to expire, the owner can make a fresh off-road declaration, if he or she wishes.

An estimated €55 million was being lost annually through motor tax evasion linked with retrospective declarations. Motor tax receipts for the half-year to the end of June 2014 are €47 million ahead of those in the same period in 2013, despite the fact that there has been no increase in motor tax in the intervening period. While not all of the increase in motor tax income can be attributed to the change in the rules for off-road declarations, it is clear that the measure is having an impact. The new arrangements strike a balance between the need to tackle tax evasion which hurts compliant motor taxpayers and a degree of flexibility to allow vehicle and fleet owners to arrange their affairs only to pay motor tax for periods their vehicle is in use on the road.

Given the extent of tax evasion which was for many years facilitated by retrospective off-road declarations, it is not intended to reintroduce retrospective declarations, accompanied by tax credits, as to do so would risk reopening the evasion loophole via motor tax credits.

The introduction of such a scheme for hauliers would inevitably lead to calls for similar treatment from other categories of road users, risking ultimately completely negating the improvements in the fairness of the motor tax regime introduced last year.

Michael Comiskey (Fine Gael)
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I accept the rules introduced made a big difference to the Exchequer - with €55 million to accrue to it. However, as I outlined, I feel it would be good for businesses and people involved in road haulage if a tax credit was introduced. I do not believe it would open up a loophole that would help them evade tax. The money would have been paid and there would be no question of it being refunded, but it would be held in credit and when the truck was put back on the road, the credit would kick in. I think fleet owners in the United Kingdom have a facility such as this, where tax credits are available. I suggest the Minister should take another look at that at some stage.

Paudie Coffey (Waterford, Fine Gael)
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I do not have the answer the Senator requires. The figures I have outlined clearly state that by the end of June 2014, the motor tax receipts are €47 million greater than for the same period in 2013. It seems clear therefore that the measures implemented are having the effect of ensuring people who might in the past have tried to evade paying motor tax are compliant. The Department does not intend to review the scheme at this stage.