AA PLEASED TO HEAR MINISTER STATE ‘NO INCREASES FOR FUEL, VRT OR MOTOR TAX’
The AA was pleased to hear Finance Minister Michael Noonan explicitly state during his budget speech that there is to be no increase in taxes on petrol, diesel, VRT or Motor tax.
“We were obviously pleased to hear Minister Noonan’s words in his speech today.” Says Director of Consumer Affairs Conor Faughnan. “This means the cost of motoring did not get any worse today, which is a relief.”
The AA believes that the succession of austerity-era tax increases on fuel have been so severe that there was simply no scope for increasing them again.
“Fuels taxes were raised on 5 separate occasions since the first austerity budget of October 2008.” Says Faughnan. “Those increases combined to add 23 cent per litre to the retail price of both fuels. The price advantage we once enjoyed over Northern Ireland is all but gone; any further increases would send so much trade north that they would actually cost the exchequer money.”
While most motorists will be relieved to have been spared the AA says that there are still reforms needed for motor tax which currently discriminates very heavily against older cars.
“Approximately 75% of Ireland’s 1.88 million private cars date from 2008 or earlier and are therefore taxed on the old system based on engine size.” Says Faughnan. “For those that have larger engines the tax burden on them has become very unfair.”
“Someone lucky enough to be able to buy a brand new luxury car for €45 or €50,000 is likely to pay €270 per annum in road tax. Compare that to someone who cannot afford to replace an 8 year old run-about with a 2.2 litre petrol engine; that car costs €951 to tax every year. It is an anomaly that needs to be addressed.”
Fuel taxes explained:
Petrol :
Pump price €1.543
Excise including carbon 58.771c
Nora 2c
Vat 28.86c
Total taxes: 89.631c
Pre-tax price 64.669c
Tax as % 58.1%
Diesel :
Pump price €1.446
Excise including carbon 57.902c
Nora 2c
Vat 27.03c
Total taxes: 86.932
Pre-tax price 57.668
Tax as % 60.01%
Note: AA Fuel Usage figures: If a car does 12,000 miles per year (19,200 kms) at a fuel consumption rate of 30 miles per gallon (9.42 litres per 100 kms) that car will use 150 litres of fuel per month. At current prices that motorist will pay €231.45 month for petrol of which €134.47 is tax. The annual cost is €2,777 of which €1,614 is tax. For diesel, a similar car will pay €216.9 per month of which €130.35 is tax; or €2,602 per annum of which €1,564 is tax.