Written answers

Thursday, 16 December 2021

Department of Finance

Vehicle Registration Tax

Photo of Brian LeddinBrian Leddin (Limerick City, Green Party)
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117. To ask the Minister for Finance if he plans to further revise the rates of vehicle registration tax in view of continued strong sales of fossil fuel vehicles in 2021; and if he will make a statement on the matter. [62409/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The 2020 Finance Act overhauled the structure of rates for vehicle registration tax (VRT) to strengthen the environmental rationale of the tax in line with Government policy to radically reduce emissions from road transport. The rate changes provided for in the Finance Bill 2021 reinforce this progress by increasing the fiscal gap between low emission vehicles and the rest, thus incentivising motorists in the market for a new car to make ‘greener choices’.

Following the changes introduced last year there has been significant increases in electric vehicle registrations in 2021, mirrored by decreases in the number of high emission fossil fuel vehicles. The middle emissions bands (where most of the volume lies) have also experienced a shift towards lower emission vehicles. The average WLTP (Worldwide Harmonised Light Vehicle Test Procedure) figure for vehicles new and used in 2020 was 135.6 gCO2/km (band 14). This has fallen to 122.6 g/km (band 11) to end July 2021. This is clear evidence that VRT reform is leading to lower emission cars on our roads.


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