Brendan Griffin (Kerry South, Fine Gael)
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438. To ask the Minister for Environment, Community and Local Government if he will put in place a fairer motor tax system in order that newer more expensive vehicles pay more than older less valuable vehicles as the current system penalises persons who cannot afford newer cars and allows situations where a person with a brand new Mercedes pays less than the person with a 20-year-old family hatch; his views on the decline in national motor tax receipts due to the emissions-based system and that the figures will continue to decline; and if he will make a statement on the matter. [25404/14]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Income from motor tax is kept under regular review with rates and bands adjusted in a budgetary context as is deemed necessary. In recognition of the lower average motor tax paid in respect of vehicles taxed on the basis of CO₂emissions compared to vehicles taxed on the basis of engine capacity, whilst at the same time maintaining the incentive for purchasers of new vehicles to buy low emission vehicles, differential increases were applied in recent budgets. The level of increase applied to vehicles taxed on engine capacity, the basis of taxation for pre-2008 cars, was less than that applied to newer vehicles taxed on the basis of CO₂emissions. The average increase in motor tax for passenger vehicles taxed on engine capacity was 7.5% in Budgets 2012 and 2013, compared with increases in 2012 ranging from 7.5% to 54%, and in 2013 ranging from 4% to 25%, for vehicles charged on the basis of CO₂ emissions. In Budget 2013, 4 new bands below 140g CO₂/km, as well as a zero band for electric vehicles, were introduced to facilitate the continued incentivising of low emission vehicles and the maintenance of the tax base.

The vehicle fleet is progressively replaced by cars taxed on the basis of CO₂rather than engine capacity. At 31 May 2014, 31.4 % of the passenger vehicle fleet was taxed on the basis of CO₂emissions and the proportion of the fleet taxed on this basis is increasing by approximately 5 percentage points per year. The implications of this and the range of other factors impacting on overall motor tax revenues is kept under ongoing review.