Cian O'Callaghan (Dublin Bay North, Social Democrats)
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129. To ask the Minister for Communications, Climate Action and Environment if the changes to benefit-in-kind introduced recently in relation to company cars have been assessed in terms of their impact on emissions; and if he will make a statement on the matter. [2009/23]

Eamon Ryan (Dublin Bay South, Green Party)
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The 1 January 2023 changes to benefit-in-kind in relation to company cars was legislated for in the Finance Act 2019 and is, therefore, an area of tax policy that lies within the remit of the Minister for Finance. From that date the amount taxable as BIK remains determined by the car’s original market value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands will determine whether a standard, discounted, or surcharged rate is taxable. The number of mileage bands is reduced from five to four. In certain instances, the new regime from 2023 will provide for higher BIK rates, for example in relation to above average emissions and high mileage cars. It should be noted, however, that the rates remain largely the same in the lower to mid mileage ranges for the average lower emission car. Additionally, EVs will benefit from a preferential rate of BIK, ranging from 9 – 22.5% depending on mileage. ICE vehicles will be subject to higher BIK rates, up to 37.5%. The Minister for Finance has stated that the new structure with CO2-based discounts and surcharges is designed to incentivise employers to provide employees with low-emission cars.

The Department of the Environment, Climate and Communications has not carried out any emissions abatement modelling of this tax policy. However, the Department of Transport is assessing the role of BIK relief in the context of EV usage incentives/disincentives and the implementation of recommendation 24 of the EV Policy Pathway Progress Report. The role of transitioning our passenger car fleet to EVs in achieving our abatement targets is set out in the Climate Action Plan 2023.