Motor tax review: Rural quandary lingers

Motor tax review: Rural quandary lingers
File image of tax disc.

Government ministers never tire of telling us that running a country entails the arduous business of taking difficult decisions.

Sometimes it sounds almost like a complaint or a plea for pity made by men and women who have taken roles in politics and government — and who have accepted generous salaries — entirely against their will.

Some of these tough decision might have consequences including injury or loss of life, while more commonly their impact is on the financial or environmental columns in life’s balance sheet.

A difficult decision over which finance ministers are preparing to sweat concerns the current petrol tax regime,

in which rates are based on either engine size or, for newer vehicles, CO2 emissions. It’s a 20th-century tax structure well past its use-by date.

As more drivers switch to low-emission cars and vans and, along with that change, the growing popularity of battery-powered vehicles, the Government’s income from motor taxes will fall. The resulting hole in the State’s income and spending budgets will have to be filled... a task that will call for, whisper it, difficult decisions.

Ministers will have before them a number of options. One of them will appear to be eminently logical. If vehicles can no longer be taxed on engine size and emissions, the only other metric available is the mileage put on the clock. Vehicle owners would pay according to the distances they drive.

This isn’t a novel proposal. It was tabled earlier this century, and rejected when TDs representing rural and commuter belt areas anticipated , not unwisely, hostile feedback from voters.

The can, then, was kicked down the road, as such cans often are. But it’s back again, and with it familiar considerations.

The first problem is that it would punish car users in the country’s rural areas, where public transport alternatives are inadequate to meet the day-to-day social and economic travel needs of people who have no choice but to rely on private car use.

Our special report on the state of Knocknagree, Co Cork, yesterday was about the economic decline of a village which in the last decades of the 20th century had 12 shops, one of which doubled up as a post office.

Today, it’s a village without shops and a post office, which means the use of a car is essential, not a luxury to be taxed at unfairly high rates. Car use in rural areas is also important in tackling social isolation, now a serious problem in rural Ireland.

Taxes are useless if they cannot be collected efficiently. How would a motor tax based on kilometres driven be paid?

Would drivers, AA Ireland asks, be expected to report distances driven? Could we expect, runs the unasked question, all drivers to do that honestly?

Another option suggested by AA Ireland might be a higher cost per kilometre rate when driving in an urban area with alternative forms of public transport, and a lower level in rural areas.

Is there yet technology that could measure vehicle use in that way, given that they might be driven within and beyond cities in a single journey? We suspect not.

Difficult, isn’t it? But the struggle with the motor car has to be solved for the greater good.

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