Budget 2017: No increase in tax on diesel despite lobbying

Among the few surprises in Budget 2017 was the decision by the Government not to increase excise duty on diesel for cars, despite extensive lobbying by environmental groups, while, at the same time, extending VRT relief of €5,000 on electric vehicles for a further five years.
Budget 2017: No increase in tax on diesel despite lobbying

Both decisions by Minister Michael Noonan were welcomed by the Society of the Irish Motor Industry.

Describing it as a ‘satisfactory’ budget, Simi president Alan Greene said: “For the motor industry, the good news is that electric vehicle VRT and SEAI grant supports have been extended for five years while those for hybrid and plug-in hybrid vehicles have been extended for two.

“Overall we would have to see it as a satisfactory budget that has focused on stability and carefully supporting the continuing process of recovery in the new Brexit-dominated economic situation.”

In announcing the extension of electric vehicle relief, Mr Noonan said it would give the motor industry and consumers a chance to invest in cleaner technology.

It means buyers will continue to get a total of €10,000 off the price of the vehicle as they also qualify for a €5,000 Sustainable Energy Authority of Ireland (SEAI) grant.

Buyers of hybrid vehicles will continue to get VRT relief of up to €2,500 for two years, on top of a €5,000 SEAI grant — a total of €7,500 — over the same two-year period.

However, the budget drew a scathing response from the AA.

“The Coalition Government’s first budget has done nothing for motorists and contained no measures to address the crisis in motor insurance prices,” it said.

“There was no attempt to ease the burden of fuel taxes, no change to motoring taxes, and no positive measures on road safety.”

Meanwhile, the Government plans to spend €319m on roads and public transport next year as part of an overall €4.5bn investment.

Public Expenditure Minister Paschal Donohoe said the money would cover the completion of Dublin’s Luas cross-city expansion as well as building and improving roads such as the Gorey to Enniscorthy route and the New Ross bypass.

However, once again, there was no announcement of any budgetary measure to upgrade the Cork to Limerick route.

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