Pat Breen (Clare, Fine Gael)
Link to this: Individually | In context

Question 98: To ask the Minister for the Environment, Heritage and Local Government the attempts he has made to inform prospective car owners of tax changes due to be implemented; and if he will make a statement on the matter. [20819/08]

John Gormley (Dublin South East, Green Party)
Link to this: Individually | In context

As announced in my Carbon Budget of 6 December 2007, a fundamental change is being made in the manner in which motor tax is charged for new cars to give effect to the commitment in the Programme for Government to introduce measures to rebalance motor tax in favour of cars with lower CO2 emissions. The Motor Vehicle (Duties and Licences) Act 2008, giving effect to the changes was enacted in March.

The new motor tax system complements the new CO2 based VRT system which applies to the purchase of a new car and which is administered by the Revenue Commissioners. Both the new CO2 based motor tax system and VRT systems come into operation on 1 July 2008.

Linking the VRT and motor tax rates to CO2 emission levels will mean that those purchasing cleaner, low emission cars will pay less while those opting to purchase higher emitting vehicles will pay more. Both systems apply the same seven bands for determining the taxation class.

My Department has worked closely with the Revenue Commissioners, the Department of Transport and the motor industry to ensure the smooth introduction of the new system.

The websites of both my Department and the Revenue Commissioners include comprehensive information, including questions and answers, on the new motor tax and VRT systems. Information on the new motor tax system has been supplied and is available on motor tax offices websites. The website of the Society of the Irish Motor Industry (SIMI) has more specific information on the CO2 emissions ratings of individual car makes and models as does the website of Sustainable Energy Ireland.

On a more individual basis, motorists who registered their cars in the first six months of this year will, next month, prior to receipt of the motor tax renewal notice, receive a letter explaining the new system and how it affects their motor tax position. Many of these owners will be transferred to the new CO2 based system on first renewal of their motor tax.

A key part of both the new CO2 based motor tax and VRT systems will be a new mandatory labelling system for cars based on CO2 emission levels.

Experience has shown that existing labelling requirements are not sufficiently consumer-friendly, and that an improved design would be beneficial to car buyers. It is my intention to introduce a new information label based on the seven CO2 bands from 1 July. The label will be similar to the energy-rating label which already exists for many consumer electrical goods and which is already familiar to consumers. The label will also include information on fuel efficiency, the amount of motor tax and the applicable rate of vehicle registration tax.

In this way, consumers will be fully aware of the incentives that are being created through changes to the motor taxation system. This will assist them in making informed decisions. The new labelling regime will be promoted as part of the climate change campaign. Separate legislation to give effect to labelling proposals will be brought forward shortly.