Terence Flanagan (Dublin North East, Independent)
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839. To ask the Minister for Environment, Community and Local Government his plans to introduce a monthly direct debit payment option for motor tax (details supplied); and if he will make a statement on the matter. [38429/13]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I have no plans currently to introduce a direct debit payment option for motor tax.

Motor tax is payable on an annual, half-yearly or quarterly basis. The quarterly and half-yearly payment options incorporate a surcharge element to cover the higher administrative costs involved in processing such applications. The estimated annual income from the increased charges for half-year and quarterly vehicle licences is in the region of €50m. Were a monthly pro-rata system to be introduced, this loss in income would have to be compensated for elsewhere in the motor tax system, or through the taxation system generally. It would also have a negative transitional impact on the flow of income to the Local Government Fund and consequently on grant allocations to local authorities from the Fund.

There would also be significant once-off costs in setting up such a system, as well as ongoing administrative, control and financial costs. Any such proposal would require enforcement provisions to ensure that there is a system in place to recoup income lost to the taxpayer where there are insufficient funds in personal accounts to meet the payment or where the direct debit option is cancelled by the account holder once a disc is issued, and provisions to enable recovery of the disc where required.