Motor tax system to change amid concern over ‘off-the-road’ declarations

THE motor tax system is to be revised to counteract the growing problem of motorists making false declaration of vehicles being off the road in order to avoid paying motor tax for short periods, Environment Minster Phil Hogan has said.

Department of the Environment figures estimate that genuine and bogus off-the-road declarations see the Exchequer miss out on approximately €75 million in revenue per annum.

Officials have become increasingly concerned that the current system is open to abuse as it is difficult to retrospectively verify periods where motorists have declared that their vehicles were off the road.

Between May 2009 and July 2010, the total value of off-the-road declarations was more than €94m.

Mr Hogan said a motor tax system similar to that in Britain is being considered in the context of developing a new motor tax bill. It would meant that motorists could only make off-the-road declarations about future use of their vehicle.

In Britain, every vehicle must be taxed if it is used or kept on a public road.

While it allows for motorists to submit a Statutory Off-Road Notification, they cannot be backdated or applied for retrospectively.

Mr Hogan said he was concerned at the high level of off-the-road declarations being made by motorists and acknowledged that the procedures governing their use was open to abuse.

He said the current rule whereby an off-the-road declaration has to be witnessed by a member of An Garda Síochána could be considered “ineffective”.

Mr Hogan said gardaí might only witness the signature on a declaration without being in a position to verify whether the vehicle was in use on the road for the period in question.

He said it was his personal view that the practice was exacerbated by the custom and practice of allowing a month’s grace for the payment of motor tax.

“The common perception that this one month grace period exists probably feeds into the notion that driving without valid motor tax for short periods is acceptable.”

A recent report showed that 27% of vehicles registered in Monaghan in 2008 were declared off road for part of that year. More than 22,500 vehicles in Co Galway and 12,000 vehicles in south Dublin also availed of the exemption for a period during the same year.

“It is hard to credit that all these were genuine cases of vehicles being off the road,” said Labour TD Robert Dowds.

Mr Dowds urged the Government to consider a measure used in Switzerland where a tax disc has to be returned to a local authority for the period a vehicle is off the road.

A report by the Local Government Efficiency Review Group published in July 2010 highlighted how “off-the-road” declarations were open to “significant abuse”. It estimated that such declarations, which average 396,000 per annum, see the Exchequer €75m miss out on each year.