Written answers

Tuesday, 12 October 2021

Department of Finance

Departmental Correspondence

Photo of Mary ButlerMary Butler (Waterford, Fianna Fail)
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127. To ask the Minister for Finance if he has received correspondence (details supplied); the status of a response being issued; and if he will make a statement on the matter. [49623/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Budget 2021 saw motor tax reform introduced in the context of the transition to the new vehicle emissions test procedure, the Worldwide Harmonized Light Vehicles Test Procedure (WLTP), and in light of Government commitments to reduce road transport emissions. Cars in the existing CO2fleet continue to be taxed on the same banding structure that has been in effect since 1 January 2013, while there were some modest increases to rates in the higher emitting Bands C to G, the first increases in motor tax since that date. Pre-2008 cars are still taxed according to engine size, and those rates were not changed in Budget 2021. The old, discredited New European Driving Cycle (NEDC) motor tax table was adjusted to reflect climate action priorities and to ensure a level playing field with the introduction of a third table that covers WLTP cars registered from 1/1/2021.

The Programme for Government 2020 contains a commitment to an average of a 7% reduction in greenhouse gas emissions year-on-year from 2021 to 2030 and to achieving net zero emissions by 2050.The transport sector currently accounts for 20% of Ireland’s greenhouse gas emissions levels and a reduction in emissions levels in the sector, through a combination of taxation and incentivisation, will form a key part of achieving that target.Private car usage represents 50% of those emissions.In this regard, the CO2based motor tax system for private cars, which comprise the bulk of the vehicle fleet, is structured in such a way as to incentivise the uptake of electric and lower CO2-emitting vehicles, with these attracting lower motor tax rates than higher emitting vehicles.

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