Written answers

Wednesday, 20 September 2017

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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154. To ask the Minister for Finance his plans to implement measures to protect local manufacturers in view of the adverse effects of Brexit on the economy (details supplied). [39269/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Since the referendum in the UK in June 2016, the euro-sterling bilateral exchange rate has appreciated significantly.  I am conscious of the challenges which this is posing for the exporting sectors of the economy, especially those in the more traditional sectors of manufacturing.

With regard to the specific concerns raised by the Deputy, the Irish Vehicle Registration Tax (VRT) system has a number of policy objectives. Firstly, VRT is an important source of revenue for the State.  In addition, it also seeks to reflect the negative externalities caused by using the vehicle in the State. These externalities are the costs to society and to the environment that, without the tax, would not otherwise be reflected in the price of the vehicle and for which the consumer would not otherwise have to pay. 

In the case of motor vehicles, these include environment externalities such as air pollution, which is why one of the bases for imposing VRT is the vehicle's carbon emissions.  Other externalities which VRT seeks to reflect include the costs to society of providing and maintaining the road infrastructure, traffic control, relevant emergency services, and vehicle registration and licensing.  The funds raised through VRT go towards compensating the Irish State for these significant costs.

I wish to assure the Deputy that the Government is fully cognisant of the challenges which Brexit presents and the need for policy actions. As we cannot control the international environment or exchange rate developments, it is important that we continue to focus on the factors which we can control, in order to enhance our competitiveness and boost our productivity. Ensuring a sustainable path for the public finances is also of fundamental importance.

Greater market diversification must be part of the policy response, so that dependence and exposure to the UK market is reduced. As part of the Government’s trade strategy, Ireland Connected, a number of measures have been set out to specifically address Brexit related issues, including diversification of markets for indigenous exporters.

In addition, my Department continues to work with the Department of Business, Enterprise and Innovation, SBCI, Enterprise Ireland, and the Department of Agriculture to develop potential supports in response to the future needs of businesses impacted by Brexit. Development of these proposed responses is subject to resources being agreed as part of the annual budgetary process.

Advisory supports in relation to business planning, such as those provided by the Local Enterprise Offices and Enterprise Ireland, will also be particularly important in assisting viable but vulnerable SMEs that may be adversely affected due to Brexit. These supports will help raise awareness of both private market financial supports and existing State supports.


Anne Frawley
Posted on 22 Sep 2017 10:09 am (Report this comment)

VRT ... should always only have been the minimal cost of a registration plate.

The state joined the EU and thus its exchequer becomes subject to the free movement of people and goods.... if joe citizen is to "compete" then he must be able to buy where ever in the EU is the most competitive ... the state by imposing such an unfair tax is interfering in the free market ..is harming Irish businesses, is denying the Irish citizen of the right to proper competition...

Ironic is it not that the government lauds the need to abide by EU competition rules yet it essentially imposes a tax designed to "protect" monies into the state coffers which at the same time eliminates Irish businesses ability to secure competitive costs while competing with its EU neighbours...makes a laugh of the idea of the free movement of goods ....

Permanent government works to the principal that the rules don't apply to it ... Serious questions need to be asked of Europe why the level of this tax has not been questioned by them....

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