Michael McGrath (Cork South Central, Fianna Fail)
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VRT is an emissions-based tax and therefore the amount of VRT incurred will vary across different vehicle makes and models. The charge is determined by the Open Market Selling Price of the vehicle. While there were no changes to VRT as part of Budget 2023, recent reform to the rates structure has provided for increased VRT rates for high emission vehicles, while lower emission vehicles continue to incur low rates of VRT. This reflects the environmental rationale of the tax and underpins Government commitments to decarbonise road transport.

The motor tax system was also reformed in Budget 2021, in line with Government commitments to reduce emissions from road transport and in the context of transitioning to the new Worldwide Light Test Procedure (WTLP) emissions testing regime. In order to do this the existing 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 the new WTLP table.

Government policy with regard to vehicle taxation is to lower the emissions profile of the fleet. Recent reform has been focused on incentivising behavioural change towards low emission vehicles. The overall policy with regard to these taxes is kept under review as part of the Tax Strategy Group and Budgetary cycle.

Regarding future changes, as the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.