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.
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 five separate occasions since the first austerity budget of October 2008,” said Director of Consumer Affairs, Conor 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,” said 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.”