Pearse Doherty (Donegal, Sinn Fein)
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2245. To ask the Minister for Housing, Planning, Community and Local Government his plans to review the motor tax system in view of the perceived or actual inequities in the system particularly for cars registered before 2008 and those persons that cannot afford to pay their tax in a single annual lump sum; and if he will make a statement on the matter. [28635/17]

Eoghan Murphy (Dublin Bay South, Fine Gael)
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Motor tax for pre-2008 cars is based on engine size.  The basis of charging from 2008 onwards is on carbon dioxide emissions.

With the exception of some categories of vehicle that have a low annual rate, motor tax can be paid on an annual, half-yearly or quarterly basis.  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 1960's.   

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, which operates the online motor tax system, as well as 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.

Based on the number of transactions in 2016, the annual cost of abolishing the additional charge associated with the half-yearly and quarterly options would be in the order of €55.3m.  Based on the current number of vehicles in the pre-2008 tax category, each reduction of 1% in motor tax rates for these vehicles would cost €5.3m annually.  The loss of income that would arise from changing the current arrangements in either instance would have a negative impact on the total collected via motor tax and would have to be borne elsewhere in the motor tax system or through the taxation system generally; any such changes could therefore only be considered in a Budgetary context.