New car-tax system proving chaotic

The Irish motor industry says it is in "an absolutely chaotic position" because it has not been given details, as promised, of the Government's changes to emissions-based taxation, in advance of placing orders for 2008.

The industry has complained to the Government that it had been promised as far back as the last budget that details of the move to an emissions-based road-tax system would be made known before last July, which marked the deadline for a six-month lead-in required by car manufacturers.

January is the busiest month for car sales in Ireland, with 23 per cent of yearly sales. It is followed by February and March and between them the three months account for almost 60 per cent of all new car sales. The industry is expecting sales in the order of almost one million cars in that period.

But the Society of the Irish Motor Industry (SIMI) has written to Minister for Finance Brian Cowen complaining that those sales are now in danger, as the dealers are "at the mercy" of a new system which has not been disclosed.

The society is particularly angered because it responded to the Government's call for consultation with a submission on the subject last February.

However, it still hasn't heard what the new system's thresholds or taxation bands will be.

Society of the Irish Motor Industry spokesman Cyril McHugh said a more simple version of the change may have been to switch the tax from road tax to fuel, reflecting a change from ownership tax to usage tax.

"Even the Greens say they don't mind you having a Mercedes outside your door if you don't use it," he quipped.

But on a more serious note, he said the changes "are very worrying as we are operating in a vacuum".

In addition to letters of complaint to the Minister, SIMI also referred to the difficulty in its pre-budget submission, claiming it had already moved on CO2 emissions.

The submission pointed out that the average CO2 per kilometre for Ireland in 1995 was 180g. In 2004, the CO2 per kilometre for new passenger cars sold in Ireland was 167g per kilometre.

Owing to efficiency improvements in the new passenger car fleet, Simi argues that further reductions of 16 and 28 per cent respectively were planned.

"It is regrettable that in Ireland, a concern over emissions has transformed, among many decision makers, into an anti-car attitude. Rather than embracing the renewal of the national fleet by new, more fuel-efficient cars, obstacles are constantly being placed in the way of this renewal. The net result is that the importation of older, bigger, more polluting cars gets more favourable treatment," the submission added.

A spokesman for the Department of Environment, which is involved in the drafting of the new scheme, said no decision on the new scheme had yet been taken.

The spokesman indicated that the department was aware of the industry's scheduling, but added that new measures may contain a lead-in time and might not be implemented immediately in January.