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(File image) EVs only make up approximately 2.7% of the national fleet but the uptake is "currently moving more rapidly". Alamy Stock Photo

'Weight-based' tax for cars considered to offset the annual €1.5b cost of switching to EVs

Recent reports suggest the introduction of an increase to registration tax, congestion charges and weight-based charges.

Drivers of new petrol and diesel SUVs could be hit with new “weight-based” vehicle registration and motor taxes in the next budget.

The government’s tax advisors suggested the introduction of weight-based taxation among options to plug the hole in the exchequer from the switch to electric cars. The electrification of the fleet is costing €1.5 billion per year in lost motor tax, VAT, and petrol and diesel excise receipts.

The Department of Finance published reports yesterday from the government’s Tax Strategy Group, comprising senior officials and political advisers from across the Civil Service. 

This year’s report on Climate Action and Tax examined the introduction of “weight-based” taxation, whereby heavier cars get a heavier tax.

The advisors noted that the weight of a vehicle “generally correlates with vehicle emissions” and suggested that the introduction of a weight-based tax would incentivise the purchase of vehicles with lower emissions.

It also explored similar schemes in other EU member states such as France, which has introduced the scheme as an additional charge, on top of motor tax, with a cap of €50,000 and an exemption for EVs.

France introduced weight-based taxes for every petrol or diesel car that went over the permitted 1,800 kilogram allowance – at €10 for every additional kilogram.

The TSG said the Irish vehicle registration tax (VRT) and motor tax system “could theoretically adapt a similar surcharge for cars falling beyond a certain weight or size threshold”.

The TSG noted that while uptake of EVs has been “slow in the past”, with EVs only making up approximately 2.7% of the national fleet, uptake is “currently moving more rapidly”.

Statistics from the Society of the Irish Motor Industry indicate that over 50% of new petrol and diesel cars, bought last year, were SUVs.

Other suggestions from the TSG to balance the deficit included the introduction of congestion charges. The TSG noted that a project from the Department of Transport, Project BRUCE (Better Road User Charging Evaluation), is currently considering this.

The TSG added that as the uptake of electric vehicles continues to increase, the government will have to consider the “financial sustainability” of tax breaks of up to €5,000 for EVs.

Over half of people who bought a new EV were able to benefit from tax relief last year. Full tax relief is only available on cars costing less than €40,000 however, the average price of a new EV is €51,377. Partial relief is available on cars costing between €40,000 and €50,000.

Significant growth, yet limited scope

Revenue from band one of VRT, which covers EVs and the best performing hybrids, has seen “significant growth” since the last budget, while revenue from VRT bands for vehicles with much higher emissions has fallen.

The TSG suggested a 1% increase for those on the higher bands of VRT (bands 11-20) would allow the exchequer to regain revenue from the vehicles that have “above average” emissions, such as SUVs.

This increase, while raising an estimated €26 million, would be in line with the “polluter pays” priniciple, the TSG said.

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    Mute Johnny
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    Oct 14th 2014, 10:58 AM

    Can never understand people who are willing to pay slightly more for peroni. It is definitely not a superior beer, is bland and hails from a region far from renowned for their brewing skills. so why fall for the marketing and the fancy tap?

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    Mute David Cullen
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    Oct 14th 2014, 11:03 AM

    It’s a good bottle of beer, better than others on offer in most pubs. On tap it’s rubbish.

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    Mute Roland 303
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    Oct 14th 2014, 11:05 AM

    Not a huge fan of Nastro Azzuro myself but Peroni red label is a class beer. Would be my number 1, followed by Starapramen and Budvar.

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    Mute jason bourne
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    Oct 14th 2014, 11:05 AM

    I love peroni. Lovely rich smooth taste and I don’t seem to have as bad a hangover the next day for some reason. There are some places where it’s on a par, price wise, with hinekan, bud etc

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    Mute Johnny
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    Oct 14th 2014, 11:06 AM

    But still worth paying a bit extra for? I’m not convinced.

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    Mute David Thomas
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    Oct 14th 2014, 11:25 AM

    All these so called “premium beers” are often just the standard lagers in their own country. I have some Italian friends and they say peroni is one of the cheaper lagers in Italy.

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    Mute thetruth
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    Oct 14th 2014, 11:38 AM

    Roland. Try morretti especiale. Blows the nastro out of the water. Fantastic beer

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    Mute Johnny
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    Oct 14th 2014, 11:45 AM

    That’s completely true David. Seem to have a lot more red thumbs than expected. I can find no reason why it would be priced above Heineken or carlsberg. Or even carling/fosters for that matter. It’s pretty much the same style beer using similar techniques for mass production. It doesn’t use any special ingredients, maybe perhaps a bit more alcohol content but this shouldn’t be enough for the price hike. Perhaps I’ve turned into a beer nerd over the past years with my preference for German Weiss and local craft beers but even these compare in price more favourably than peroni and these are definitely far superior. I guess tastes vary so people will have their own opinion. I for one won’t fall for the marketing. Well at least not that marketing

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    Mute Shane Kinsella
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    Oct 14th 2014, 12:35 PM

    Peroni is a far a nicer beer than the usual shite we get over here, like the bud and Heineken crap.

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    Mute thetruth
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    Oct 14th 2014, 1:00 PM

    A few great beers ive come across in the last yr or so. St. Mels are lovely and so are mc graths. Very good craft beers

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    Mute Raymond Connolly
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    Oct 14th 2014, 11:11 AM

    Beer….. My one weakness.

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    Mute Seán A Haon
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    Oct 14th 2014, 1:51 PM

    The cause of and solution to all of life’s problems.

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    Mute Very fond of
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    Oct 14th 2014, 11:27 AM

    Bottle of Grolsch = a thing of beauty.

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    Mute Karl Johnston
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    Oct 14th 2014, 11:24 AM

    Italian beer……… hahaha haha. :-/

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    Mute tax slave
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    Oct 14th 2014, 12:03 PM

    Thy make great pizza them Italians but don’t know about there beer tho

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    Mute Range Rover P38
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    Oct 14th 2014, 2:03 PM

    Red Peroni = no hangover.

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