The Automobile Association of Ireland has responded angrily to Minister for the Environment Phil Hogan’s motor and carbon tax increases, as outlined in this week’s Budget.
In addition to a rise in motor tax from January 1, the annual rate of carbon tax has increased by €5 per tonne since Wednesday of this week.
AA Ireland director of policy Conor Faughnan has described the tax hikes as ‘terrible news’, which will impact negatively on both motorists and the motor industry. Responding to claims that the Minister’s increase on carbon tax was a measure to protect the environment, Mr Faughnan said that the name was a red herring.
“It is an utter load of nonsense – the carbon tax should not be allowed to be called a ‘carbon’ tax,” he told the Kilkenny Advertiser.
“It has absolutely nothing to do with the environment; it is de facto another excise duty on fuel.”
The carbon tax has added around one and a half cent to fuel costs, both petrol and diesel. This is on top of the Government’s two per cent VAT increase, which will likely result in an extra 2.4 cent per litre when it comes into effect.
The Irish motor industry was quick to adapt to previous administrations’ tax band changes, with a more efficient range of cars rapidly appearing across the country’s showrooms.
Conversely, it will now be the lower emission cars – in band A and band B – that will face the highest increases. In 2007, the AA warned that the incentivised system would ultimately erode the tax base, as people complied by moving to cleaner vehicles. New cars in Ireland are now so efficient that all would have been classified as ‘ultra-low emission’ five years ago.
“It represents bad faith to the individuals who made a conscious choice in the last three years to buy greener and more fuel efficient cars,” said Mr Faughnan.
The taxes are seen as devastating news for Ireland’s struggling motor industry, which has already sustained heavy job losses since the onset of the recession. The Government scrappage scheme, which temporarily injected some life into the sector, ended in July. Motoring organisation SIMI has warned that thousands more jobs could be lost in the beleaguered industry in the coming year.
