Irish motorists paid over €5 billion in motoring related taxes last year - breaking all previous records.
And, with the extra Vehicle Registration Tax (VRT) and VAT payments as a result of the increase in new car sales so far in 2006, plus the additional excise duty paid as a result of higher fuel costs, the Government is set to take in substantially more this year from Ireland's motorists, according to the Society of the Irish Motor Industry (SIMI).
A total of €5,086 million was paid on fuel excise, road fund licences, VRT and motoring-related VAT by the Republic's 2.1 million motorists during 2005, which means every vehicle owner paid an average of more than €2,500 each in motoring taxes.
Vehicle Registration Tax, VAT and excise duty on fuel made up the bulk of the record tax take. For the first time ever, VRT payments on new cars alone exceeded €1.1 billion - or almost €100 million every month in 2005. However, it was fuel excise duty that topped the motorists' tax bill with the Government taking in over €1.9 billion last year from motorists filling up their vehicles with increasingly costly fuel.
This means more than €5.2 million was taken every day by the Government in fuel excise duty, which makes up 44c in every €1 spent on fuel.
In light of the amount now being paid by motorists in tax for the dubious privilege of driving in Ireland, the motor industry has called on the Department of Finance to take optional life-saving safety equipment, such as vehicle stability programmes, additional airbags and lane departure warning systems, out of the VRT net and thus make them more affordable to new car buyers. Currently, all equipment fitted to a new car, regardless of whether it is a safety feature or not, has VRT and VAT added, which means its cost can increase by over 30 per cent.
This, says the industry, pushes optional life-saving features out of the reach of many car buyers.
The Minister for Transport, Martin Cullen, has already gone on record as saying that he would favour a move that would make any life-saving equipment affordable to more car buyers.
Adding its voice to the call for the registration tax to be removed from life-saving features, the Road Safety Authority has said anything that helps cut deaths and injuries on Irish roads should be considered.
"Any mechanism which could make safety equipment more accessible to the public, especially child car seats, should be considered," said an RSA spokesman.
However, the Department of Finance has so far failed to introduce such a scheme, although in a statement it has, for the first time, indicated that such a move is being considered: "[In relation to] excluding safety elements from the VRT net, there could be difficulties with the definition of the term 'safety equipment'. The scope of safety equipment could include a wide range of equipment from airbags, to traction control, to tyre technology, to hands-free mobile phone kits, to air conditioning," said a Department of Finance spokesman.
"However, issues like the above are considered in the context of the upcoming Budget."
Understanding the difficulty that the Department foresees in defining safety equipment, Cyril McHugh, the Society of the Irish Motor Industry (SIMI) chief executive said: "Car purchasers will choose extra safety elements provided they aren't too expensive. Adding up to 30 per cent in VRT pushes these items outside the range of most. We could discuss what constitutes a safety item endlessly.
A much simpler approach is to deduct €1,500 for any new car purchased with more than two airbags. With the possibility of 200,000 new cars having a minimum of three airbags, the lives saved will more than justify the cost. In any event, the government will still take over €1 billion in VRT in 2007."
In its pre-budget submission, which will be presented to the Minister for Finance and his advisers tomorrow, SIMI says Ireland would not be alone in introducing a tax break for additional safety equipment. The society points to Denmark where the registration tax on safety items fitted to new cars was significantly reduced. It suggests that Ireland needs to follow suit if the Government is to "take seriously its commitment to reduce the number of fatalities on Irish roads".
SIMI points out that Ireland's current high taxation regime is negatively affecting the uptake of non-standard safety equipment in new cars.
It says that the removal of the VRT burden on such life-saving equipment is a simple and cost effective way of saving lives.