Pat Breen (Clare, Fine Gael)
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Question 119: To ask the Minister for Finance, further to Parliamentary Question Nos. 166 and 175 of 11 February 2009, if he will exempt Shannon Airport from the proposed €10 air travel tax; and if he will make a statement on the matter. [10485/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, I announced in Budget 2009 that an air travel tax will come into force in respect of passengers departing from Irish airports on and from 30 March 2009. A general rate of €10 per passenger will apply, with a lower rate of €2 for shorter journeys.

The Finance (No.2) Act 2008 confirms the introduction of an air travel tax from 30 March 2009. However, I took account of concerns raised by the regional airports particularly those on the western seaboard. The lower rate of €2 will apply to departures from any Irish airport where the destination is 300kms or less from Dublin airport. This means that all Irish departures, subject to the tax, to locations such as Manchester, Liverpool and Glasgow will be subject to the €2 rate.

In addition, to assist the smaller airports I have increased the exemption threshold for airports included in the air travel tax, from 10,000 to 50,000 departing passengers in the previous calendar year. We currently face significant financial challenges and the air travel tax is an important revenue raising measure.

Ireland is not unique in regard to applying a tax on air travel. A number of countries within the EU apply similar taxes including, the UK, France and the Netherlands, as do Australia and New Zealand. The proposed rates for the Irish air travel tax are not unreasonable both for shorter and longer journeys, when compared to rates in other countries.

It should be recognised that tourists will only be subject to the tax on their return journey. The additional €10 or €2 in the context of a much larger purchasing decision involving travel, hotel expenditures etc. should not have much of an effect on tourist numbers. I appreciate the airline industry continues to go through a difficult period. However, this difficult trading period has, in addition to weak world economic activity, been largely driven by a massive spike in oil prices. Oil prices have now halved from the all-time high prices experienced earlier in the year.

I tried to be as fair as possible in looking at areas for additional tax revenues. It is also worth noting that fuel used by commercial airlines is completely exempt from tax, so it's a sector that already has considerable preferential treatment. I have no plans to further revise the air travel tax.

Terence Flanagan (Dublin North East, Fine Gael)
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Question 120: To ask the Minister for Finance his views on correspondence (details supplied); and if he will make a statement on the matter. [10540/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that as a general rule all vehicles imported permanently into the State must register for Vehicle Registration Tax (VRT) purposes within one working day of arrival. This rule applies equally to vehicles imported by EU and non EU persons. In practice, Revenue allows latitude of a maximum of seven days for registration.

However, Section 135 (a) of the Finance Act 1992 permitted a European or other foreign-registered vehicle which was temporarily brought into the State by a person established outside the State, to be exempted from the requirement to register for VRT purposes for a period normally not exceeding 12 months from the date upon which the vehicle concerned was brought into the State.

Section 64 of the Finance (No.2) Act 2008 amends this section to provide for the registration (without the payment of VRT) of vehicles temporarily brought into the State for a period greater than 42 days.

When the new temporary registration system comes into effect, the vehicle owner will be required to register with Revenue and receive a temporary number plate, which will have to be displayed on the vehicle. This will provide a mechanism whereby Revenue can maintain a record of vehicles benefiting from this exemption, quickly identify applicants who are not eligible for a temporary exemption and must immediately pay any VRT due; and identify vehicles coming to the end of a period of temporary exemption (i.e. one year), so that VRT can be collected when it becomes due. In addition the amendment provides that vehicles seeking temporary registration will be required to undergo a pre-registration test as a pre-condition for registration.

The Deputy may wish to note that Revenue mobile units and An Garda Síochána continue to monitor both Irish and foreign-registered vehicles on our roads as part of their regular and ongoing enforcement activity. For their part, Revenue mobile units challenged 20,669 vehicles last year. Of these, some 15,231 satisfied Revenue officials that the registration status was in order at that particular time and no further action was taken. 5,438 vehicles required further investigation and action including registration and payment of VRT, seizure of vehicle, export of vehicle, grant of transfer of residence relief or temporary exemption, and reports for prosecution. In addition to the VRT collected, penalties totalling €1,109,315 were imposed in respect of these vehicles. In 2008, some 55,000 second hand vehicles were registered and the total VRT paid amounted to €190m.