Monthly instalments for motor tax ruled out

The Government has ruled out allowing hard-pressed drivers pay their motor tax in monthly instalments, despite making an additional €55.3m this year from those forced to renew their discs on a three- or six-monthly basis.

Monthly instalments for motor tax ruled out

Local Government Minister Eoghan Murphy had been asked by a local authority to introduce an easy payment method, similar to the TV licence stamp system operated through post offices.

The call was made by Cork County Council after Independent Cllr June Murphy won unanimous support from colleagues and her chief executive, Tim Lucey, to halt the practice of charging some motorists more for acquiring motor tax through quarterly or half-yearly instalments.

The owner of a one-litre car pays €37 extra yearly per year by using the quarterly payment system while it’s €51 more for motorists driving a car with a 1,401-1,500 cc engine and an additional €114 for two-litre engines.

The department says, on average, half-yearly instalments costs 11% more and quarterly payments average €13 more extra.

North Cork Cllr Gerard Murphy had suggested post offices could be used to administer monthly payment stamps, similar to the TV licence payment process.

But Mr Lucey had said he was only willing to pilot such a scheme through the local authority’s motor tax office if permission was granted by the Government.

However, the minister’s private secretary, Niamh Redmond, has advised the county council of a number of reasons why monthly instalments could not be considered.

She said introducing monthly instalments would greatly increase administration costs and could throw up subsequent problems with enforcement and retrieval of discs.

Furthermore, she said that changes of ownership during the monthly instalment period could lead to complications, as would payment by direct debit if there were insufficient funds in a payee’s account.

Ms Redmond also pointed out introducing such charges would put an extra workload on motor tax offices operated throughout the country by local authorities and the Vehicle Computer Services Division of the Department of Transport, which processes all motor tax transactions, regardless of whether they were completed online or through local authority offices.

She added the loss of €55.3m from the additional money collected via the current system would have to be recouped through increased motor tax charges, or through other taxation.

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