Seán Connick (Wexford, Fianna Fail)
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Question 95: To ask the Minister for Finance if his attention has been drawn to the fall in car sales in 2008 and 2009; if his attention has further been drawn to the fact that car scrappage schemes introduced by the German and United States governments have been successful in reviving the car sales industries in those countries; his views on whether a revenue neutral car scrappage scheme would assist the car industry here; if he will introduce a revenue neutral car scrappage scheme in budget 2010; and if he will make a statement on the matter. [35309/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am aware of the current challenges facing the motor industry, along with most other industries, arising from the impact of weak world economic activity. I recently announced, following discussions with the motor industry, the introduction of a new VAT margin scheme on second-hand cars with effect from 1 January 2010. Under the margin scheme, dealers will account for VAT on their profit margin, that is, on the difference between the cost of acquiring the car and its reselling price. This will apply to all second-hand cars purchased and resold on or after 1 January 2010.

In relation to the introduction of a scrappage scheme, as the Deputy will be aware, taxes are considered in the context of the budget process. It is the usual practice for the Minister for Finance not to speculate in advance of a budget on what it will contain; and I do not propose to deviate from that practice.