McCreevy backs British on tax plan

FINANCE Minister Charlie McCreevy has backed a British veto on plans to abolish Vehicle Registration Tax on cars. The proposal being drawn up by the European Commission would scrap VRT, which at present adds from 21% to 30% to the cost of cars in Ireland, and replace it with an annual road tax.

VRT brings in almost E900 million a year to the Irish Exchequer, which the Department of Finance says is equal to 2% on the standard rate of income tax and is money it could not do without.

Similar recent moves towards creating a single market, such as the harmonisation of taxes on diesel and unleaded petrol, have met with stiff opposition from member states.