Motor industry agonises over stimulus for industry

national | miscellaneous | other press Monday February 02, 2009 11:47 by Steerpike steerpike at lookout dot ie

With increasing numbers choosing not to buy new cars here, or going north in search of second-hand bargains, there has been much discussion in the Irish motoring industry as to how a moribund market might be revived. The obvioius option: scrapping excise duty on cars (or Vehicle Registration Tax) is the elephant in the room that has been studiously ignored.

Time to hit VRT

There has been much lately in the papers about this issue. For instance, in last Wednesday's Irish Times "Motors" supplement, many commentators within the industry discussed how their crisis-hit industry might best be boosted. Today, SIMI are holding a press briefing on the same issue. They, and other industry figures, have thus far proferred options such as a new scrappage scheme, and reducing VAT to match the UK's 15% rate - hence reducing the differential between this jurisdiction and Northern Ireland.

Every option, in fact, other than the obvious one: scrap VRT. This penalises Irish consumers who wish to buy their cars in other EU states, and it contrary to the priniciples of free movement of goods and services, which this Government has signed up to. Why does SIMI not take a case to Europe on this issue?

Not only is this tax immoral and uncompetitive, it patently lacks transparency, as it is arbitrary in nature.

More on this tax - including how it is formulated - on the link below, with references to the Irish Times article mentioned.