Joe Carey (Clare, Fine Gael)
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525. To ask the Minister for Environment, Community and Local Government his plans to deal with the regressive nature of the motor taxation system, as it applies to both pre and post 2008 registered cars, and the use of the option to pay either three-monthly, six-monthly or annually; and if he will make a statement on the matter. [17275/15]

Alan Kelly (Tipperary North, Labour)
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Motor tax on cars registered prior to 2008 is based on engine capacity. Motor tax on cars registered since 2008 is based on CO ₂emissions. I do not consider that either basis of taxation is regressive. In the case of cars taxed on engine capacity, the banding is structured so that the level of tax payable increases as the engine size increases. In the case of cars taxed on the basis of CO₂, the banding is structured so that higher emitting cars attract a higher rate of tax than lower emitting ones. The move to CO₂has been effective in reducing emissions - 95% of all new vehicles purchased are now in the lowest emitting A and B bands, which carry the lowest tax rates. Overall, the average emissions from new cars purchased in Ireland in 2013 was 121g CO₂/km, down from 164g CO₂/km in 2007, before the CO₂system was introduced, meaning that the country has already reached the EU target of 130g CO₂/km for 2015.

In respect of the payment periods for motor tax, the rates applicable for the half-yearly and quarterly options are 55.5% and 28.25% of the annual charge, respectively. These relativities have remained generally consistent since the 1960s.

The differential takes account of the extra workload for staff in motor tax offices and the Driver and Vehicle Computer Services Division of the Department of Transport, Tourism and Sport and the resultant administrative costs and printing costs that arise, including the issuing of renewal notices. Each quarterly renewal of motor tax follows the same administrative procedures as the annual renewal process. Consequently, renewing on a quarterly basis generates four times the workload of an annual renewal for the equivalent period.

I have no plans currently to review the basis for paying motor tax on a half-yearly or quarterly basis.