Seanad debates
Tuesday, 10 November 2015
Commencement Matters
Motor Tax Rates
2:30 pm
Paschal Mooney (Fianna Fail)
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I thank the Cathaoirleach for placing this motion on the Commencement debate. I welcome the Minister of State. I hope events have moved on since I tabled this motion, which was to be taken last week. Due to pressure on the Cathaoirleach, it was deferred until today. I hope this extra time means the clarification required has already been given.
Since the ruling by the Court of Appeal on 21 October in the case of the DPP v. Perennial Freight Limited, Freight Transport Association Ireland, FTA Ireland, has been active in this regard. It has been in receipt of multiple queries by telephone and e-mail on whether articulated tractor units should now be weighed separately for the purpose of calculating motor tax. Despite the fact FTA Ireland has contacted the Department of Transport, Tourism and Sport, the Department of Finance, the Department of the Environment, Community and Local Government and the Revenue Commissioners it has received no clarification. I understand that at the beginning of this month there was some further clarification on the amount the owners of articulated tractors will have to pay, and the rate for articulated vehicles is now €333, which is the rate for non-agricultural tractors.
I have a number of questions on this, which are combined, and I hope the Minister of State will address them in her response.Is the €333 an annual rate for articulated vehicles from now on? Will the Minister of State confirm this sum is the rate applicable for vehicles whose tax is to be renewed in November and December before the tax reductions announced in the budget kick in? This is important. Does it apply for November and December? Will the Minister of State confirm this to the local tax offices? I understand they are being forced to handle calls from confused hauliers nationwide. I have heard a few of these responses and there is most definitely confusion in the local authority offices. Different answers have been given to queries raised by hauliers. When will the Minister reflect the announcement in law? Will it be done in a statutory instrument or amending legislation? As a result of the successful case taken, will the Minister of State confirm that the several thousand prosecutions outstanding against hauliers for under-taxation of articulated units will now be dropped by the DPP? Will the Department refund the motor tax unlawfully overcharged on hauliers due to this misreading of the legislation by the local authorities and An Garda Síochána?
The conclusion of Mr. Justice Peart is summarised in paragraph 42 on page 28 of his judgment. He stated that the practice which had seen hauliers such as the appellant bring a trailer to be weighed in association with the tractor for the purpose of being licensed for the coming period had in his view no statutory basis. That was the reason the case was won by the freight company. That more or less sums up what I am attempting to find out and what Freight Transport Association Ireland members are attempting to find out. I will be grateful for the Minister of State's response.
Ann Phelan (Carlow-Kilkenny, Labour)
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I thank the Senator for raising this issue. Last month in budget 2016, the Minister for Finance announced that the rates of motor tax on larger goods vehicles are being reduced. The reductions apply to goods vehicles with an unladen weight exceeding 4,000 kg and will take effect for vehicle licences taken out with a commencement date of 1 January 2016 or after. As part of the changes announced, the rate structure of 20 bands is being simplified to five bands of motor tax, which will range from the current level of €92 per annum for electric goods vehicles up to €900 per annum for all goods vehicles in excess of 12,000 kg. The cost of the reductions is some €43 million annually. This change will benefit the owners of more than 28,000 goods vehicles.
A week later, on 21 October, the Court of Appeal made a judgment on a case between the Director of Public Prosecutions and Perennial Freight Limited. If I was to summarise briefly the import of the judgment, it is that only the mechanically propelled element of an articulated vehicle - in other words, the cab of the vehicle - falls to be taxed on the basis this is the only part of the vehicle that is independently capable of mechanical propulsion. Up to that point, articulated goods vehicles had been taxed based on the weight of the cab and the heaviest unladen trailer or combination of trailers that would have been drawn by the cab. The judgment further ruled that articulated vehicles are more appropriately taxed as a different class of vehicle than had been the case up until this judgment. This is the category under which non-agricultural tractors are taxed and it has a single annual rate of tax of €333. The judgment does not affect rigid trucks which continue to be taxed on unladen weight.
The necessary technical adjustments have now been made to the national vehicle and driver file to apply the €333 rate. This has been done pending fuller consideration of the implications of the judgment and the appropriate response to it. Legal advice on certain elements of the judgment has been sought by my Department through the Office of the Attorney General and once it is received and considered, a decision on how best to proceed will be taken.
On that basis, I hope the Senator understands that at this point in time, I am not in a position to comment further on the matter.
Paschal Mooney (Fianna Fail)
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I thank the Minister of State. I appreciate that this matter is not within the her direct area of responsibility and that she is therefore relying on what her officials are telling her. I understand from the latter part of her reply that because legal advice has been sought, many of the questions I have raised in terms of refunds probably cannot be answered. My reading of the situation - perhaps the Minister of State can confirm this - is that the necessary technical adjustments have now been made to the national vehicle and driver file, NVDF. This would answer the question as to whether the local tax offices have now been informed of the change, which would eliminate any confusion in this area. The only question I can ask is if the Minister of State has any idea at all, or got any extra information apart from the response, as to how long it will take for the legal advice to work its way through the system so that there can be further clarification.
Ann Phelan (Carlow-Kilkenny, Labour)
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I do not have any further clarification, nor do I have a timeline. If the Senator sends me an e-mail stating the specific issues he has raised, I will undertake to try to get clarification on them from the Department.
Paschal Mooney (Fianna Fail)
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Perhaps the Minister of State would address by letter the questions I asked, which were specific to the matter.