Cowen urged to drop taxes as car sales rise

With tax revenues for the first nine months €1.6 billion ahead of target, and the new Minister for Finance set to benefit from falling borrowing requirements, the Society of the Irish Motor Industry (SIMI) has launched its pre-budget submission in an appeal to Mr Cowen to think of the motorist in his speech this December.

In what is predicted to be a generous budget due to buoyant tax revenues, Cyril McHugh, chief executive of SIMI said: "The burden of motoring costs on consumers today is excessive with both punitive levels of taxation and ever increasing inflation. In 2003 the total contribution from motorists to the exchequer was over €4 billion.

"Through the reduction of Vehicle Registration Tax (VRT) and other motor-related duties, the costs for motorists can be alleviated and move Ireland closer to complying with an EU request to the eventual phasing out of Registration taxes.

"With the lift which this reduction would give to the car market, the consumer could get a better deal at no loss of revenue to the Government."

In this year's submission the SIMI is calling for a reduction of VRT by 2.5 per cent, the introduction of an tax equalisation measure for used cars exported out of Ireland, a reduction in the severity of the Benefit In Kind (BIK) changes in last year's budget and a 5 cent reduction in excise duty on fuel to combat recent price rises in fuel.

To date car sales are up 7 per cent over the first nine months of the year, according to the latest registration figures. Up to the end of September 147,338 new cars were registered, up 6.9 per cent on the same period last year, the highest January to September figure since 2001.

Toyota looks set to end the year as the best-selling marque, currently holding 13.1 per cent of registrations, with Ford coming in second at 11.05 per cent.

In the premium sector, BMW continues to close the gap on Mercedes, with sales of 4,498 cars to date. This compares with 4,593 for its fellow German rival.

Elsewhere, Jaguar has recorded growth, while Lexus remains steady with sales of 489 to date.

At the other end of the market Tata has recorded seven registrations over the nine months for its Indian-built off-roaders.