SIMI welcomes opportunity to debate future of VRT

Following the publication of the Commission on Taxation Report, SIMI have said that the motor industry welcomed the opportunity to debate the future of VRT.

SIMI have campaigned against the tax for a long time.

However, SIMI Director General Alan Nolan warned that the effects and timing of any changes must be well considered.

Mr Nolan said: "While we do not welcome proposals to increase fuel prices with the imposition of carbon taxes, a move toward taxing vehicle usage, rather than purchase, is certainly more acceptable if it is part of a rebalancing arrangement rather than simply adding a further burden to motorists.

Increasing fuel taxes impacts not only motorists but on businesses in fuel distribution by increasing their funding requirements at a time when the availability of finance is extremely difficult.

"The key challenge is how we get from where we now are to that situation. We would have to urge caution in relation to two key points.

"Firstly, if this proposal is only for consideration in the longer-term, rather than for implementation in the foreseeable future, then this should be clearly stated as sales will be affected if an expectation is created that is not realistic.

"Secondly, implementation of the VRT changes in 2008 have shown that ill-conceived or ill-timed significant taxation changes can have disastrous effects on the market, on businesses and on Exchequer revenues. For this reason, consultation involving real engagement with stakeholders is urgently required.

Nolan stressed that given the report’s potential to damage next year’s new and used car markets, "it is essential that this is given priority".

The motor industry is disappointed that the Commission failed to address the current two-tier road tax system which continues to cause concern, but we warmly welcome their positive view in relation to the benefits of a Scrappage Scheme.