Thursday 22 March 2018

'Clobbered' drivers pay 10pc of total tax take

AA Ireland spokesman Conor Faughnan
AA Ireland spokesman Conor Faughnan

Charlie Weston, Personal Finance Editor

THE Government has been accused of "clobbering" motorists after it emerged that taxes on driving make up a huge proportion of all taxes paid in the State.

Around €1 in €10 of all taxes paid come from duties on petrol and diesel, valued added taxes on cars and motor tax.

Last year the different taxes on drivers amounted to €4.3bn. This is out of a total of €37.8bn in all forms of taxes generated last year.

AA Ireland's Conor Faughnan accused the Government of over-taxing motorists and said driving was not a luxury but was being treated as if it was.

"The Irish motorist is an enormous contributor to the exchequer. Between fuel taxes, road tax, VRT (vehicle registration tax) and VAT (value added tax) we contribute over 10pc of all tax revenue. That is seldom recognised and motorists do not get sufficient credit for it," Mr Faughnan said.

He said motoring was not a luxury item – it is a basic necessity for quality of life.


"Yet it is taxed as if it were champagne and caviar," he said. "It is the very fact that the car is so essential, especially in rural Ireland, that makes us such an easy target."

He was responding to a Dail reply on motor taxes asked by Fianna Fail's Michael McGrath, seen by the Irish Independent.

And the figures do not include tolls – the toll on the Port Tunnel in Dublin is €10 one way at rush hour.

Mr McGrath asked Finance Minister Michael Noonan questions in the Dail on the different taxes imposed on drivers.

He then added the figures together and calculated that the total paid in various taxes last year amounted to €4.3bn.

Tax on petrol alone amounted to €850m last year, with diesel generating €1.13bn for the State. Motor tax came in at €1.1bn.

"The car is a quite simply a necessity for families," Mr McGrath said.

"We have reached a tipping point in respect of the amount motorists pay in tax and there is absolutely no scope for further increases in the next Budget."

Mr Faughnan, who looked at the figures, said he had predicted that VRT would collapse with the move to lowering VRT on low-emission cars.

Last year VRT receipts amounted to €437m. But in 2007, before the changes to the tax, it had generated €1.4bn.

This has come about because of the change from taxing on engine size to taxing on CO2 emissions.

A spokeswoman for Mr Noonan said the minister was "very aware of the sacrifices made by all taxpayers".

"However, it should be borne in mind that taxes on motoring as a proportion of the total tax take has actually reduced from 2011 to 2013."

Irish Independent

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