Tax reforms spur drivers to consider low-emission cars

GOVERNMENT plans to encourage more drivers to get behind the wheels of low-polluting cars were given a boost yesterday with a survey showing motorists backing the changes.

Nearly two-thirds of motorists planning to buy cars this coming year will change to one with lower emissions if it results in motor tax savings, the research stated.

Under amended laws, originally signalled in the budget, low-polluting cars bought since January 1 will qualify for lower motor tax rates after July.

The survey, published by the Irish Taxation Institute (ITI) yesterday, was carried out by RedC on 1,001 people on April 7-9 last.

On changes to the motor tax system, the survey found 65% of those who planned to buy a car in the next 12 months would be more likely to change to a car with lower emissions if it resulted in motor tax savings.

Changes will see drivers of high-emission cars bought after July penalised, with “gas guzzlers” hit by levies of up to €2,000 a year.

Tax for cleaner cars could drop to €100 under the new seven-band scheme.

In addition to the motor tax changes, the Vehicle Registration Tax (VRT) will be determined by the CO2 emission rating of the car and no longer by its engine size.

The survey found that two-thirds (66%) of all car owners/purchasers are aware of the impending change to the VRT system.

However, two-thirds of those questioned also said that while they were aware of the changes, they did not know the specific details of the new rules for VRT.

Commenting on the findings, ITI president Joan O’Connor said: “There appears to be a difference in opinion for those who are completely aware of the new proposals compared to those who are aware that changes are coming down the tracks but are unclear as to the detail. Those who have an understanding of the nature of the changes are much more likely to consider choosing a car with lower emissions.

“This suggests that further education of the public about the proposed changes... may lead to an increased demand for lower emission cars.

“As we have seen in the past, through the slashing corporation tax, the plastic bag levy, business and regeneration incentives, people and businesses respond positively to innovative tax changes.”

Environment Minister John Gormley stated yesterday he would be carrying out a public information campaign in June on the tax changes.

Mr Gormley said the new labelling system for emissions and car tax would be similar to the energy rating labels already used for consumer electrical goods.