Dáil Éireann - Volume 405 - 20 February, 1991

Written Answers. - Taxes on Transport Services.

62. Mr. Yates asked the Minister for Finance if he will outline the current level of taxes by way of excise duties, VAT and any other taxes on transport services such as vehicles, parts and diesel fuel; the way in which they compare with similar taxes in the United Kingdom Northern Ireland, and the EC generally; and if he will outline his policy in relation to harmonisation of same in the single market of 1992-93.

Minister for Finance (Mr. A. Reynolds): As the Deputy's concern appears to relate to commerical transport, the reply has been framed in that context:

[982]Excise Duty

Ireland

Commercial vehicles

6.5 per cent of the chargeable value

Parts

Nil

UK/Northern Ireland

Commercial Vehicles

Nil

Parts

Nil

In the time available, it was not possible to obtain up-to-date figures on excise duties on vehicles for the other member states of the EC. However information on the levels of excise duty or corresponding taxes in the other member states as at 1 September 1987 is contained in the most recent edition of the Inventory of Taxes, published by the European Commission, a copy of which is available in the Oireachtas Library.

The various rates of excise duty charged on road diesel in member states are set out in Table 1 which is being circulated in the Official Report.

VAT

The rates of VAT applying throughout the Community on road diesel and on vehicles are set out in Table 2 which follows. The rates of VAT applying to spare parts cannot be readily identified.

Road Tax

The most readily available comparative road tax data relate to heavy goods vehicles with a laden weight of 38 tonnes. The Irish road tax for this category of truck will be increased to about £1,000 per annum — from £900 per annum — from 1 April 1991. According to EC Commission data, the average EC road tax for a 38 tonne truck is about IR £1,200 p.a. — ranging from about IR£300 p.a., in Spain to about IR£4,000 p.a., in the UK.

Further details are available in the above mentioned EC Inventory of Taxes.

EC Harmonisation Proposals

VAT: It is proposed that vehicles, spare parts and road diesel will be liable to VAT at the standard rate — a range [983] of 14 per cent to 20 per cent has been put forward by the Commission.

Excise

To the extent that any excise duties on vehicles and spare-parts rely on the operation of border controls, the completion of the Single Market will require their abolition.

For road diesel, the Commission have recently proposed that the excise duty rate should be between 245 and 270 ECU per 1,000 litres — £18.93-£20.86 per hectolitre — from 1 January 1993.

Road Tax

The latest Commission proposal is that the road tax for a 38 tonne truck would initially be harmonised at minimum rates of between IR700 and IR2,150 — depending on axle configuration — over the period 1992-94. Road tax rates would then be further harmonised, on a phased basis, between 1995 and 1999, in order to cover road infrastructure costs generated by heavy goods vehicles, on the basis of road cost and usage data which the Commission envisage being submitted by EC member states.

The Deputy will be aware that the [984] Government have taken a very positive attitude to the completion of the internal market, including the tax harmonisation dimension, but have also indicated that the budgetary problems which the various proposals pose must be recognised and addressed. We will be approaching the specific tax proposals in the transport area against that background, and with a view to ensuring that the overall effect of any adjustments which may be required do not undermine the competitive position of Irish road hauliers or exporters.

Following are the tables:

Table 1

Road Diesel: Excise Duty Rates as at January 1991

IR£/hectolitre

Italy

28.13

Ireland

22.31

United Kingdom

20.90

Portugal

20.10

Spain

19.17

France

18.16

Denmark

17.31

Germany

16.77

Belgium

15.77

Netherlands

13.53

Luxembourg

7.88

Greece

5.72

Table 2

VAT on Motor Vehicles and Road Diesel in EC Member States

Member State

VAT Rates on Road Diesel

VAT Rates on Motor Vehicles

%

%

Belgium

19

Commercials:

19

Passenger Vehicles:

Up to 3,000cc

25

Over 3,000cc

33

Denmark

22

All

22

Germany

14

All

(except invalid carriages 7%)

14

Greece

16

All

6

Spain

12

Commercials:

12

Passenger vehicles:

33

France

18.6

Commercials:

18.6

Passenger vehicles:

25

Ireland

23*

All

23*

[985][986]Italy

19

Commercials:

19

Passenger vehicles:

Up to 2,000cc

19

Over 2,000cc

38

Luxembourg

12

All

12

Netherlands

18.5

All

18.5

Portugal

17

All

17

UK

15

All

15

*21% from 1 March 1991.