Brendan Smith (Cavan-Monaghan, Fianna Fail)
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41. To ask the Minister for Finance if he will give detailed consideration to the issues raised in correspondence by a national organisation (details supplied), in particular their proposals to assist in advancing decarbonisation; and if he will make a statement on the matter. [52339/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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In relation to proposals to assist in advancing the decarbonisation of the transport sector in Ireland, it is important to note that the existing vehicle tax structures in the State have a strong environmental rationale, with the more pollutant, fossil-fuelled cars paying higher rates of tax, between motor tax, benefit-in-kind (BIK) and vehicle registration tax (VRT). In contrast, low-emission cars and electric vehicles (EVs) are subject to low rates of tax. The policy approach aims to incentivise the uptake of zero-to-low-emission vehicles which, alongside aligned non tax measures, will help to reduce Ireland’s transport emissions.

There are currently a number of tax measures in place to support the uptake of EVs, including a very low VRT rate, VRT relief of up to €5,000 to end-2025, a tapered BIK relief and preferential rates of BIK thereafter, a low rate of motor tax of €120 per annum, and BIK exemptions related to the charging of EVs.

Additionally, Budget 2025 saw the introduction of an emissions-based VRT system for light commercial vehicles. From 1 July 2025, a reduced rate of 8% on the Open Market Selling Price is applied to category B vehicles with emissions of 0g/km up to and including 120g/km.

Notwithstanding the strong environmental rationale across our vehicle taxes regimes, new proposals are considered, and current vehicle tax policies are kept under review as part of the Tax Strategy Group and the Budgetary process. As the Deputy will be aware, it is a longstanding practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.