Tuesday 25 June 2019

Surge in used car imports has cost the Exchequer €1bn in tax, says Nissan chief

The surge in the popularity of second-hand imported cars has resulted in a €1bn loss to the Exchequer over the last four years, the head of Nissan Ireland has claimed. Stock photo
The surge in the popularity of second-hand imported cars has resulted in a €1bn loss to the Exchequer over the last four years, the head of Nissan Ireland has claimed. Stock photo

Michael Cogley

The surge in the popularity of second-hand imported cars has resulted in a €1bn loss to the Exchequer over the last four years, the head of Nissan Ireland has claimed.

Used imports have been tipped to overtake new car sales this year as a weakened sterling and lower taxes make cars from overseas more appealing to consumers.

Please log in or register with Independent.ie for free access to this article.

Log In

The average contribution paid to the Exchequer on a new car is around €8,500 but is a much lower €2,500 on second-hand cars. Nissan Ireland's chief executive James McCarthy said that around 50,000 new car sales were displaced last year by the rise in imports.

"The displacement of new car sales since 2016 has cost us [Ireland] around €1bn in forgone taxes," McCarthy told the Sunday Independent.

"That situation is set to worsen in 2020 when around 70,000 new car sales are expected to be displaced by imports. This will result in a likely cost to the Exchequer around €420m."

McCarthy called on the Government to make importers "play by the same rules" as car manufacturers have to.

New cars coming into Ireland are subject to a minimum Euro 6 rating. Euro 6 is a minimum standard introduced in 2015 aimed at reducing the harmful pollutants from the exhaust pipes of vehicles.

McCarthy said that the same standard should be implemented on cars coming in from the UK.

"We should ban non-Euro 6 cars, but we can't do that because it would be in breach of free movement of goods within the EU," he said. "However, if we don't ban them we will be in breach of our commitments to the EU to reduce our CO2 from transport so we're going to run afoul one way or the other."

The Nissan chief said that it was better to do so "with the motivation of protecting our environment and our economy" than it was to breach trading rules.

"Why are we facilitating Britain to deal with its CO2 problem by allowing them to dump their cars here with us? There are strong enough reasons to take this action."

Sunday Indo Business

Also in Business