We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Love your car? By how much? Rosana Prada via
Budget 2012

Budget 2012: Motor tax hike of 7.5 per cent for most vehicles

Wondering how much your car will cost you next year? Read on for the full extent of tax and fuel hikes…

MOST VEHICLES WILL see a 7.5 per cent increase in motor tax after today’s rate hikes announced in Budget 2012.

Environment Minister Phil Hogan said this evening that the Government would “continue to incentivise people to drive low emission cars that makes less impact on our environment”. However, even those cars with the bottom CO2 emissions rates will be hit with a tax increase.

Hogan said:

The restructuring of motor tax in July 2008 to base it on CO2 emissions for all cars first registered from that date has brought a welcome shift to lower emitting cars.

It has also reduced the total amount being collected, and this trend will continue as a larger proportion of car owners pay motor tax based on CO2 emissions. In current financial circumstances, we must prevent the erosion of an important part of the tax base.

For new cars, registered on or after 1 July 2008, the motor tax is based on CO2 emissions – even the lowest three of these have increased:

  • Band A (up to 120g CO2 per km): increases from €104 annually to €160
  • Band B (more than 120g to 140g CO2 per km): increases from €156 to €225
  • Band C (more than 140g to 155g CO2 per km): increases from €302 to €330

For cars registered before 1 July 2008:

  • Not over 1,000 cc: increase from €172 to €185
  • 1,001 to 1,100 cc: increase from €259 to €278
  • 1,101 to 1,200 cc: increase from €286 to €307
  • 1,201 to 1,300 cc: increase from €310 to €333
  • 1,301 to 1,400 cc: increase from €333 to €358
  • 1,401 to 1,500 cc: increase from €357 to €384
  • 1,501 to 1,600 cc: increase from €445 to €478
  • 1,601 to 1,700 cc: increase from €471 to €506
  • 1,701 to 1,800 cc: increase from €551 to €592
  • 1,801 to 1,900 cc: increase from €582 to €626
  • 1,901 to 2,000 cc: increase from €614 to €660
  • 2,001 to 2,100 cc: increase from €784 to €843
  • 2,101 to 2,200 cc: increase from €823 to €885
  • 2,201 to 2,300 cc: increase from €860 to €925
  • 2,301 to 2,400 cc: increase from €895 to €962
  • 2,401 to 2,500 cc: increase from €935 to €1,005

For the rest of the rates above this CC and for commercial vehicles see the full document here.

Fuel hikes

Motorists will also be hit by the increase on petrol and diesel – they will increase by 1.4c and 1.6c respectively – which take effect from midnight tonight. The AA said this evening that prices for both will effectively rise by another 2.44 per cent from 1 January next because of the increase in VAT to 23 per cent.

Conor Faughnan of the AA said that the impact of the increases would hit rural Ireland hardest where “mileages are higher and alternatives fewer”. He argued that the increases were actually a “tactical mistake” and that petrol and diesel is now more expensive in the Republic than in Northern Ireland whereas the converse used to be true. “Our exchequer was boosted with cross-border sales… in all, this fuel increase could wind up costing the government money”.

Retail Ireland went further this evening, claiming that the increase in carbon tax would drive those living in border counties to travel north of the border to fill up their fuel tanks. Frank Gleeson, chairman of Retail Ireland, said:

In light of the deteriorating economic situation in Britain, George Osborne announced last Tuesday that he was cancelling the planned 3p fuel duty increase due in January, while the UK’s 5p rise planned for August 2012 has been reduced to a 3p per litre increase.

The group, which is affiliated to IBEC, estimates a fall of up 30 per cent in trade in towns just south of the border.

Read: As it happened: Budget 2012 liveblog

In full:‘s full coverage of Budget 2012

Your Voice
Readers Comments
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.