Catherine Murphy (Kildare North, Social Democrats)
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365. To ask the Minister for Finance if he and or his officials have engaged with the Revenue Commissioners in respect of lower and or a temporary waiving of VRT in view of inflated prices for second-hand motor vehicles. [50599/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Vehicle Registration Tax (VRT) is a tax chargeable on the registration of vehicles in the State and is levied as a percentage of the open market selling price (OMSP) of the vehicle. The VRT rate is calculated on the basis of CO2 emissions, so that cars with higher CO2 emissions attracted a higher tax liability. VRT does not apply to second-hand vehicles unless they are imported from abroad and then registered for the first time in the state.

VRT has been reformed over the past two budgets to instill within the system a strong environmental rationale in line with Government policy to radically reduce emissions from road transport. The rate gap between low emission vehicles and the rest incentivises motorists in the market for a new car to make ‘greener choices’. Budget 2022 increased VRT rates progressively so that high emission vehicles are disincentised most.   

Registrations have shown consistent strong trends towards vehicles in the lower emissions bands, with significant growth in electric vehicle (EV) and hybrid registrations. Accordingly, registrations of the highest emission vehicles are decreasing. This reinforces the policy intention to incentivise low emission vehicles and discourage highly pollutant cars.