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Ministers to soften motor tax hikes with road fixes

MINISTERS are considering softening the blow of big hikes in motor tax next year by using the increased cash to fix potholed and damaged roads.

Motorists will pay more as the Government tries to recoup lost revenue caused by more cars in lower tax brackets.

The Fianna Fail-Green Party government changed the tax system in 2008 to one based on carbon emissions, but with more efficient cars a big gap in the tax take has been created.

Transport Minister Leo Varadkar told the Irish Independent that the Coalition "will have a real problem with public acceptance of higher tax if all they get is broken roads".

Disastrous

He has made his concerns known to Finance Minister Michael Noonan, who is working on the new tax scheme with Environment Minister Phil Hogan.

A third of road tax was allocated to county councils to maintain roads, but this link was broken last year because of the disastrous state of the public finances. Instead, some of the money went to the central exchequer.

Fine Gael and Labour increased tax last year, but while the rise averaged 7.5pc for some high emission bands, the more common bands were hit with increases of up to 54pc.

Mr Varadkar said: "Currently we only have enough money to do 65pc of the road maintenance we should be doing every year."

Irish Independent