Irish rate of tax evasion seven times that of UK

ROAD TAX:GAPS IN payment of vehicle road tax cost the State more than €226 million between 2008 and 2011, according to the comptroller and auditor general.

The comptroller has also noted that evasion of road tax, at about 5 per cent of all vehicles, is seven times higher in the Republic than it is in the UK.

While many of the gaps in a vehicle’s road tax history are legitimate, such as when the vehicle is off the road or has been sold, the reportl noted that an evasion rate of 5 per cent would equate to a loss to the exchequer of some €50 million per year.

The report notes that the Government intends to change the system by introducing a requirement that vehicle owners declare in advance that a vehicle will be off the road.

This approach, as opposed to owners making a declaration retrospectively, is credited with dramatically reducing road tax evasion in the UK.

The comptroller and auditor general’s report also noted that the last national survey of road tax compliance was in 2001, and it called for the Departments of Transport and Environment to ensure they have reliable systems in place to measure and monitor the level of evasion over time.

The report also noted the National Vehicle and Driver File had a list of 5.8 million vehicles, of which 5.1 million were classed as “current”.

However, of these just 2.5 million were taxed at the end of March 2012. The status of the others is “unclear”.

The report also highlighted the issue of renewal notices issued as reminders to drivers to tax their vehicles.

There was no response to 60 per cent of final reminders in a sample, and the report noted the Department of Transport took no further action.

The report also commented on traffic volume guarantees that had been given to private sector partners on the M3 and Limerick Tunnel road schemes.

Traffic volumes on these schemes are significantly below expectations, resulting in payments to toll operators in the region of €6.7 million in 2012 – and this is based on assumed traffic growth of 2.5 per cent.

Also on the assumption of traffic growth of 2.5 per cent, the State will continue to pay its partners in the M3 project until 2025, and will continue to pay the operators of the Limerick Tunnel “for the whole duration of the contract”, which is until 2041.

However, the Comptroller and Auditor General’s report did note that there was significant underspending at the Department of Transport for 2011, amounting to some €36 million.

The underspend was due to a range of items, including a cost-reduction programme and higher than expected revenue from the Road Safety Authority in respect of driving test fees and NCT levies among others.

The figure of €36 million includes an approved over-expenditure of €4.7million on tourism marketing in 2011.