Motorists pay E2,380 a year to stay on roads

Seán McCárthaigh

New figures provided by the Department of Finance show that the country's 1.9 million registered drivers paid out over E4.5 billion in taxes last year.

It means that taxes from the motor industry contributed just over 12% of all Exchequer returns last year one of the highest levels of any EU member state.

Motorists paid out over E2.2bn alone in taxes on petrol and diesel last year as the Government takes just over 0.62c out of every E1 spent on motor fuel and almost 0.57c on diesel through a combination of excise and VAT.

The Society of the Irish Motor Industry (SIMI) said last night that the new figures demonstrated clearly how the Irish motorist was being forced to pay an unfair share of tax.

"We've only recently had a report that shows that the pre-tax price of new cars in Ireland is one of the lowest in the EU. However, Ireland becomes the second-dearest country in the EU after Denmark for new car prices once tax is added," said SIMI deputy chief executive Alan Nolan.

He claimed such studies showed clearly how the Government was the "culprit" for the high costs.

Mr Nolan added that Irish drivers get blamed for causing traffic congestion, yet this problem would not exist if all the taxes paid by motorists were reinvested in road infrastructure. Government taxes on fuel, excluding VAT, accounted for over 1.8bn collected in 2004 with just over half this figure derived from taxes on petrol.

VAT receipts raised over E962m in total including E480m from the sale of cars, 328m from petrol sales, E34m from car repairs and 13m from car hire.

The Vehicle Registration Tax, which the motor industry wants abolished, raised over E946m in 2004.

However, the Government announced last autumn that it was abandoning plans to introduce a carbon tax linked to the amount of CO2 emissions from their vehicles, even though such a measure was designed to replace VRT.

Although Irish VRT appears to run contrary to EU legislation on the free movement of goods and services, the European Court of Justice recently upheld that a similar tax in Finland did not breach EU directives. Average VRT is estimated at E3,737 per vehicle, even though it can add E8,000 to the cost of a saloon.

The figures which were released in response to a Dáil question from Fine Gael TD Bernard Durkan show that the Government also collected E750m in road tax last year.

Receipts from road tolls which include the high-profile Westlink crossing over the River Liffey in Dublin last year amounted to E8m with an additional E10m in related VAT.