Denis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Question 100: To ask the Minister for Finance the reason the rate of vehicle registration tax for a car designated as a light commercial van is 20 times greater than the rate for other commercial vehicles even though it has fewer carbon emissions; if he will review this anomaly; and if he will make a statement on the matter. [31638/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Section 130 of the Finance Act 1992 defines the various categories of motor vehicle. Three main categories of vehicle are relevant to this query: Category A, cars and minibuses with less than 12 seats; Category B, certain car-derived vans and jeep-derived vans; Category C, certain commercial vehicles, agricultural tractors and minibuses with at least 12 permanently fitted passenger seats.

As the Deputy will be aware Category A vehicles are charged VRT at rates ranging from 14% to 36% of their Open Market Selling Price (OMSP) based on the CO2 emissions of the car. All category B vehicles are charged VRT at a standard rate of 13.3% of OMSP. Vehicles falling within category C are liable to a flat rate registration charge of €50.

The rates for categories B and C vehicles are, as a matter of policy, set at lower levels than for vehicles in category A as the main purpose of such vehicles generally involves either carrying goods, or carrying passengers as a commercial transport venture. As category B vehicles combine a passenger-carrying profile along with a high goods-carrying capacity and are therefore frequently acquired as category A substitutes, they are not afforded the lowest rate of VRT. Category C vehicles, on the other hand, are very rarely acquired as a substitute for a category A vehicle; and for this reason, such vehicles are afforded a lower rate than category B vehicles.