Fergus O'Dowd (Louth, Fine Gael)
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61. To ask the Minister for Finance if concerns raised in correspondence by a person (details supplied) will receive a reply; if the number of vehicles required on roads will increase, which would be contrary to emission reduction targets; and if he will make a statement on the matter. [49920/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 53, Finance Act 2017 amended section 130, Finance Act 1992 by moving category N1 vehicles with 4 or more seats and to which a BE bodywork code has not been assigned from the preferential VRT category B into the higher VRT category A.

The vehicles affected include a number of models that are commonly referred to as “sports utility vehicles” that are typically used for private purposes but their design placed them in the preferential VRT category. The purpose of the amendment is to move these vehicles into the higher VRT category. Vehicles with fewer than 4 seats remain in the preferential VRT category, as do vehicles that have any number of seats and are manufactured as pick-ups with the seating and goods compartments separated from each other. The conditions governing VAT and what is or is not reclaimable have not been affected by this amendment.

It is not expected that this measure will increase the number of vehicles on the road. The market offers a range of vehicles suitable for commercial purposes at the preferential category B rate. In fact, in time, the measure may have a modestly positive environmental impact, to the extent that it will reduce the financial incentives to purchase passenger-use vehicles with high levels of CO2 emissions, as is the case with many of the vehicles that have been reclassified.