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VRT plan sparks fear across motor industry

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New-car sales are significantly down

New-car sales are significantly down

New-car sales are significantly down

New-car sales are lagging 30,000 or so behind this time last year so it's not a good time to be talking about price rises ranging from €1,000 for your average motor.

That is the projected outcome if plans by the prestigious Tax Strategy Group (TSG) are adopted by Government in the Budget.

But something has to be done with how cars are taxed because the new, more realistic, WLTP system of measuring emissions must be fully in place by January 1 next. Doing nothing would send most prices soaring because WLTP emission figures are, on average, 21pc higher. That means most cars would incur a higher VRT cost.

The TSG proposals would extend the number of bands to 20 and punish cars with current 'average' or 'above average' emissions in favour of low-emission motors, particularly electric vehicles and low-polluting plug-in hybrids.

It should be noted that these are proposals and may or not be taken on board by Government on Budget Day. The decision will ultimately have to balance the need for action with the human, employment and political reality of an industry in crisis.

Brian Cooke is director general of the Society of the Irish Motor Industry. He fears the impact of the proposed changes on the industry and fundamentally disagrees with the VRT measures.

"We've argued that the way to reduce emissions and protect jobs is to reduce vehicle registration tax. The proposals do the opposite."

He warns: "If implemented the proposals will have ramifications for jobs and businesses." He claims the measures would slow down the replacement rate of old cars with new ones and be "counter productive" in reducing transport emissions.

Mr Cooke points to the fact that the number of new cars bought so far this year should be 140,000/150,000. At 81,000, it is at 60pc of that.

"The TSG proposals would make this even worse," he says.

We can only wait and see what will happen but something has to be done on VRT.

Indo Motoring