The Irish government is hurting from the near collapse of the country’s motor industry, as Revenue Commissioners say preliminary figures for 2009 show only €375.5 million ($524.1 million) was collected from the vehicle-registration tax.
The figure is down more than €700 million ($977 million) from 2008.
VRT is paid when a new vehicle is first registered in Ireland, and also applies to imported used cars.
Until July 2008, it was based on a vehicle’s engine size but now is calculated based on the amount of carbon dioxide a vehicle emits.
The tax ranges from 14% of the retail selling price for low-emissions vehicles to 36% for those spewing than 225 g/km of CO2.
There are two reasons for the plunging government revenue: the collapse of new-vehicle sales and the “greening” of Irish motorists, The Independent newspaper says.
New-car sales totaled 57,337 last year, down from 151,954 in 2008 and a record 184,267 in 2007.
“Also contributing to the fall in the VRT is the fact (that) a higher proportion of new cars being bought produce lower emissions (especially diesels),” the newspaper says. “As these vehicles attract a lower VRT rate, the amount going to the Exchequer is greatly reduced.”
The taxmen also will be seeing lower income-tax revenue from the auto industry on another front. The Society of the Irish Motor Industry says 70 dealerships closed last year, and the industry lost up to 11,000 workers.
New-car sales have started slowly this year, but the industry is hoping a government scrappage scheme, which chops €1,500 ($2,093) off the price of a new low-emissions vehicle when it replaces a car 10 years or older, will raise 2010 deliveries to about 70,000 units.