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Dublin: 22°C Sunday 25 July 2021

Payment plan option for motor tax not being considered

Minister Phil Hogan has ruled out the introduction of a monthly instalment payment option.

Image: James Horan/Photocall Ireland

THE MINISTER FOR Environment, Community and Local Government has said that there are no plans to introduce a monthly instalment option for motor tax payments.

Responding to a question posed by deputy Luke ‘Ming’ Flanagan in the Dáil, Phil Hogan said the State earns about €20 million from increased charges for half-year and quarterly discs.

Motor tax can currently be purchased on a full year basis or every three or six months. The rate of duty applied to half-year discs is 55.5  per cent and for quarterly discs it is 28.25 per cent of the annual rate.

Hogan said these relatives have remained the same since the 1960s except for a period in the boom years when they were reduced slightly.

The Minister said if the charges were to be changed, the loss in income to the State would have to be compensated for elsewhere in the general taxation system.

Flanagan had argued that the rates paid for half-year and quarterly discs are hitting those on lower incomes harder than in the past. He proposed that taxpayers could pay in monthly instalments but still benefit from the less expensive annual fee.

Previously, Hogan has said that the higher rates are charged to “take account of the extra workload for motor tax offices” in terms of administration and printing.

Under law, the rates could actually be higher as the Finance Act of 1952 provides that the rate of duty for a quarterly licence could be up to 30 per cent of the full-year price.

More: Backbencher calls for examination of scrapping motor tax>

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