Finian McGrath (Dublin North Central, Independent)
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Question 116: To ask the Minister for the Environment, Community and Local Government his views on a matter (details supplied) regarding car tax. [38073/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The correspondence attached to the question includes a proposal for a revised system of motor taxation containing two elements, arising from a perceived unfairness due to different rates of motor tax applicable to similar cars, depending on the date of first registration – pre-July 2008 cars based on cubic capacity and post-July 2008 cars based on CO2 emissions.

The first element of the proposal relates to car tax being used for the upkeep of the road network on the basis of the current motor tax system or alternatively related to the value of the vehicle. The latter element is, in effect, already a feature of the taxation system through vehicle registration tax (VRT) where the tax applied is a percentage of the open market selling price. The revenue collected goes to the Exchequer and expenditure derived from it is a matter for the Minister for Public Expenditure and Reform. The proceeds of annual motor tax are applied, via the Local Government Fund, to Local Authorities and the Department of Transport, Tourism and Sport, the bodies with responsibility for the upkeep of roads.

The second element of his proposal for motor tax suggests introducing a separate CO2 tax based on fuel consumption. The rate of motor tax for private vehicles first registered from July 2008 is linked to fuel consumption rates, as CO2 emissions relate directly to the carbon content of the fuel consumed. My reply to Question No. 354 of 22 November 2011 addresses the application of the CO2 system of motor taxation to vehicles registered prior to 01 July 2008.