Saturday 22 September 2018

Charlie Weston: The amount of tax paid by motorists is unfair - and it is high time it was reduced

'At current prices a typical motorist will now pay €221 a month for petrol.' (Stock picture)
'At current prices a typical motorist will now pay €221 a month for petrol.' (Stock picture)
Charlie Weston

Charlie Weston

Driving a car is becoming more expensive by the day in this country. The momentum has gone out of the Government's efforts to tackle the motor insurance crisis. That is a real pity, because it coincides with petrol and diesel prices shooting up by the pumps.

And the Government bears a large degree of responsibility for this, as it takes a huge amount of tax from motor fuels.

In fact, motorists in this country are being bled dry by the Government through taxes, ranging from excise duty on petrol and diesel, to vehicle registration tax, annual motor tax and the carbon levy.

The total tax take from motorists has been rising steadily in recent years. It now stands at over €5.4bn a year, according to Dail replies received by Fianna Fail spokesman Michael McGrath.

The tax on petrol and diesel is particularly savage.

Pump prices have hit a three-year high. Figures from insurer AA Ireland show that a litre of petrol now costs €1.476 on average, compared with €1.41 last month.

Those driving a diesel vehicle are now paying €1.378 for diesel, up from €1.31 in May.

Crude oil prices have been rising, leading to a situation where petrol has increased by approximately 9c since the start of 2018 - while diesel prices are up over 10c since the year began. This means many Irish workers are in a situation where they are struggling to afford the costs of their commute to work.

At current prices a typical motorist will now pay €221 a month for petrol.

But a huge chunk of this is made up of rip-off levels of taxation. Some €132 of the monthly fuel bill is made up of taxes on the fuel, according to calculations by AA Ireland.

For the diesel driver, a monthly spend of €206 is typical. But €113 of this goes to the Exchequer.

Drivers are being penalised.

Of course motor fuel should be taxed, but it is hardly fair that 60pc of the pump price is made up of taxes.

Remember too that emergency taxes of around 20c were put on petrol and diesel during the worst of the recent downturn.

It would not be unreasonable for the Government to remove this, especially as pump prices are rising.

Otherwise there is a risk the costs of commuting to work will become unsustainable for many. This country does not have good public transport links, particularly in rural areas.

Come on Finance Minister Paschal Donohoe: it is high time for the Government to re-assess the "exceptionally high" taxes on both petrol and diesel. Drivers are paying too much to support the State.

Sunday Indo Business

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