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Tax-take on cars plummets €700m as sales collapse

TAXES collected on the sale of new and imported cars have plummeted by €700m in just one year.

In a graphic illustration of how sales in the motor industry have collapsed, figures from the Revenue Commissioners show that only €375.5m was collected in Vehicle Registration Tax (VRT) last year.

The low tax-take adds to Finance Minister Brian Lenihan's Budget-balancing woes.

VRT must be paid when a new motor vehicle is first registered in the State. The rate of VRT varies between vehicle types, and is mainly dependent on the level of CO2 emissions.

Non-State registered vehicles, for example imported second-hand cars from the North or Britain, must also be registered and VRT paid within one working day following their arrival into the country.

The Revenue Commissioners confirmed to the Irish Independent that preliminary figures for 2009 show that €375.5m was collected -- more than €700m less than the 2008 figure.


Sales of new cars have been in steady decline since a peak in 2007 when 184,267 new motors were registered.

In 2008, the number fell to 151,954 -- but in a disastrous year for the industry just 57,337 new cars were purchased last year.

Up to 11,000 staff were laid off and 70 dealerships also closed last year.

In January 2007, some 45,864 cars were sold. In January 2008 the figure increased to 47,308 but last year it plummeted to 15,809 for the first month of the year.

And sales so far this year are trailing those for the corresponding period in 2009 by 6pc, according to the latest statistics.

However, industry insiders are hopeful the scrappage scheme -- which knocks €1,500 off the price of a new low-emission (up to 140g/km) car -- will push sales up towards the 70,000 mark.

Also contributing to the fall in VRT is the fact that a higher proportion of new cars being bought produce lower emissions (especially diesels). As these vehicles attract a lower VRT rate, the amount going to the Exchequer is greatly reduced.

Figures released by Revenue also show 1,934 vehicles were seized last year for non-payment of VRT, an increase on the 1,598 taken from motorists in 2008.

Irish Independent