Paudge Connolly (Cavan-Monaghan, Independent)
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Question 108: To ask the Minister for Finance if he will consider capping the application of the 2% motor insurance levy on policies up to €500; and if he will make a statement on the matter. [26542/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The 2% stamp duty, levied on non-life insurance premia, is part of the stamp duty system and applies to most categories of non-life insurance business, including motor insurance. It was introduced in the Finance Act 1982 at 1% and was subsequently increased to 2% in 1993. This is a modest levy compared with other EU member states, most of which have such a tax and where it is generally levied at a significantly higher rate than in Ireland, typically between 9% and 15%.

The purpose of this non-life levy is to broaden the stamp duty base, thereby raising additional revenue. It is a significant source of revenue to the Exchequer and yielded €97.7 million in 2004 across all relevant categories of insurance. It is not possible to ascertain what portion of this relates to motor insurance premia.

In accordance with normal practice it is not appropriate for the Minister to comment on possible changes to tax in the run-up to the annual budget and Finance Bill.