Taxation of alternative fuelled vehicles

System

This discussion was created from comments split from: Fine introduced for misuse of EV charging bay.

DownByTheGarden

https://www.boards.ie/discussion/comment/120065144#Comment_120065144

I really dont know how you think its nonsense. They've been working for a few years now on a way that they could tax EVs on fuel. This is it. Im sure they are still working on refining it to get as many as possible into the net, but ability to record the juice that goes into the car remotely is the major hurdle that this solves. Granny charger will be the only way around it, but im sure they are working on that now too.

When they decide to start taxing electricity used in EVs in future, now it will be a simple task. Unless you think that they will never tax EV fuel.

https://www.youtube.com/watch?v=Y4nXOyScSEA

DownByTheGarden

https://www.boards.ie/discussion/comment/120084322#Comment_120084322

So you think they arent going to tax EV fuel then?

the_amazing_raisin

https://www.boards.ie/discussion/comment/120084344#Comment_120084344

They already do, it's called VAT

creedp

https://www.boards.ie/discussion/comment/120084436#Comment_120084436

12.5% versus ballpark 50% on a litre of fuel plus higher VRT. The accelerating transition to EVs will lead to a significant reduction in motor related tax revenue so I suppose the question is how, rather than if, Govt will recoup those revenue losses from a traditional cash cow.

DownByTheGarden

https://www.boards.ie/discussion/comment/120084436#Comment_120084436

Oh there will be more than VAT. You can be 100% sure of that.

Miscreant

The Government could quite easily recoup some lost revenue here by increasing the Motor Tax on EVs to €500 per annum or something similar. At the moment, EVs are being incentivised to reach certain targets and once that has happened (or the target is close to being achieved) then the big bang of taxation will roll in.

Busman Paddy Lasty

Probably change to annual motor tax based on vehicle weight which is analogous to the old system of motor tax by engine capacity. Both don't follow the user pays principal like tax on fossil fuel does. Taxing use by mileage would be a headache and opens the door for a decent car clocking industry.

Between VAT, VRT and motor tax, the scum that decide to the tax the motorist so much need to turn their attention to accountability in public spending.

liamog

There will absolutely be taxation measures for AFVs, but it's incredibly unlikely to be a system based on supplied electricity. Imagine a system that applies excise duty to electricity used to charge an EV. It would immediately fail as you could use a granny charger to charge from any 3 pin plug socket. People go to the effort of washing green diesel they will absolutely go to the effort of plugging in to a socket.

All of the policy papers discussing replacement of fuel and motor taxes are focused on systems of road usage tax, it is seen as a much more equitable system in that it allows you to charge tax based on usage of the roads.

unkel

https://www.boards.ie/discussion/comment/120084344#Comment_120084344

Make your own free, untaxable, zero emissions, 100% renewable fuel 😎

slave1

"Untaxable" for now, you never know, they taxed daylight in the olden days so taxation of sunshine not new😎

unkel

For now indeed. Until we get a usage based tax as per @liamog's post. That's years away though, I will have produced a lot of free clean untaxable fuel by then.

the_amazing_raisin

https://www.boards.ie/discussion/comment/120086188#Comment_120086188

Since the government policy is to encourage self consumption of renewables, it would seem pointless to tax electricity going to an EV. You'd just sell it to the grid then which ESBN would prefer you didn't do

As I've said before, the government will stick with the old reliable method of a fixed annual charge

They'll probably divide up the EV category to make new rate bands and it's anyone's guess as to what they'll use, could be motor output, size, weight, efficiency, whatever

unkel

They can hardly charge a €500 fixed motor tax on clean zero emission EVs when they've put a €190-€280 fixed motor tax on cancer causing diesels for the last 15 years.

the_amazing_raisin

https://www.boards.ie/discussion/comment/120084656#Comment_120084656

In 2021 the government collected around €2-2.5 billion from Excise duties on fuel, versus a total tax take of €67.5 billion and a VAT take of €15.4 billion

It's hardly an amount to be sneezed at, but the government will hardly be bankrupted by the loss of excise duties from fuel

There's a whole bunch of other taxes they could use to recover that. A very simple one would be to raise the VAT amount on electricity from the current 9%, no way to dodge that one by using a granny lead

Miscreant

https://www.boards.ie/discussion/comment/120086475#Comment_120086475

They're the Government, they can charge whatever they like.....

All that aside, there will be some way found to plug that tax gap. Using a blunt instrument like Motor Tax would be the easiest way. Otherwise, they could use all these new fangled "Smart" meters that are being installed to see what power is being used by a property at any one time. I doubt there are many appliances in a domestic setting that would have a constant, near 7kw power draw for 5 or 6 hours during the night. Even the worst of tumble dryers and washing machines would be half that draw and not for that length of time. Couple that with an EV being registered at the address and you have a formula for charging a higher tax for that usage.

unkel

You'd think that, @Miscreant. But I could manipulate my draw at the main incomer in many different ways. I could draw a flat 2kW for 24/7 if I wanted. No matter what I used it for. Nobody would be able to tell what I was doing

Also I plan to be pretty much off grid with near zero units used from late April to late August. That includes home heating, hot water heating, all the house electricity use for a family of 5 and all my EVs. All 100% powered by the sun.

creedp

https://www.boards.ie/discussion/comment/120086480#Comment_120086480

You're right €2.5bn is not to be sneezed at and will be difficult to recover elsewhere. Can you imagine the uproar from large sections of the electorate if the Govt proposed an increase in electricity taxes to protect EV drivers.

Why wouldn't they seek to continue to recover from the motorist? I know some people think that EVs are different as they have zero tailpipe emissions but the reality is that private motoring was heavily taxed before we cottoned onto the possibility of gaining popular support for it by linking VRT, motor tax, fuel duty, carbon taxes to emissions. Its just about rebranding motor taxes and breathe life back into an old reliable.

Furze99

https://www.boards.ie/discussion/comment/120086629#Comment_120086629

But you are far from typical. Sure you told us you were heating your house at one stage from crypto mining rigs!

The state will take the easiest route - probably motor tax and it'll have to be higher than ICE equivalents to balance out loss of revenue from motor fuels.

Usage by mileage would be fairer, harder to implement.

I don't think you can escape either of those increased taxation measures as they'll apply to all regardless of how many solar panels they have.

unkel

I have paid maximum motor tax (sometimes as high as €1808 per year) in the past for many years for cars that did low mileages. I guess I am entitled to a wee break here 😂

creedp

https://www.boards.ie/discussion/comment/120087408#Comment_120087408

In fairness you should have driven more environmentally friendly cars 😁😁

the_amazing_raisin

https://www.boards.ie/discussion/comment/120086688#Comment_120086688

I literally just said that it's less than 5% of the overall tax revenue, probably even lower now since excuse got slashed and other forms of tax are bringing in more revenue

I don't doubt there's going to be some form of taxation of EV ownership in the future. Motor tax rates will go up and it's divisive when someone who can barely afford a beat up Yaris is paying more tax than a Taycan owner

But the idea that the government is going to somehow build a massive surveillance system to monitor electricity usage and determine how much of that is being used to charge an EV is just ludicrous to me

This isn't China, our government doesn't have the desire, legal basis or technical resources to accomplish any of that

The only viable option I could see for an energy tax that targets EV charging would be to tax DC charging.

This could be possible because there is some truth to the argument that DC charging is bad for both the grid and the environment, since it involves additional use of gas fired power stations

creedp

https://www.boards.ie/discussion/comment/120087774#Comment_120087774

Fully agree that its extremely unlikely that EV electricity use will be taxed and that EV taxation will be increased, most likely by an increase in VRT and Motor tax rates whenever the Govt deems its movable EV targets are met.

unkel

https://www.boards.ie/discussion/comment/120088308#Comment_120088308

After the switch from engine size based motor tax and VRT to CO2 based taxation back in 2008, the government almost immediately started to lose billions because everybody switched to cancerous, but low CO2 diesels.

Interestingly, these taxes were never increased and the government made up for the shortfall from other taxes

liamog

I imagine the technology will come at an EU level targeted at the TEN-T network. It will be sold as a unified system for inter-country travel around the EU. A few years ago the parliament called for countries to simply the multiple toll/vignettes that are required in each country.

Cars will likely have to have secured meters installed in the same vain as taxi meters and will be inspected for tampering at every NCT. I wouldn't be surprised if commercial vehicles are rolled out first where the tech can be developed and the consequences for tampering are much easier to apply.

creedp

https://www.boards.ie/discussion/comment/120088335#Comment_120088335

Yes but what a success when the policy target was to reduce CO2 emissions!! And what a boom for the 520D!

With the removal of most pre 2008 cars from the roads and the accelerated transition to EVs, unless there is another policy reset shortly car taxes will virtually disappear, can't see that happening in Ireland. Will it be another balls up.. watch this space

the_amazing_raisin

https://www.boards.ie/discussion/comment/120088383#Comment_120088383

I agree with you there that tolling will become more comprehensive

A lot of people say that road tax pays for road maintenance. That isn't true anymore, but it was the original theory behind it

While tolling doesn't directly benefit the government because it isn't income for them, a more extensive system of tolls that can't be avoided would likely pay for a lot of maintenance of the motorway network. And in turn that means it no longer needs to be funded by the taxpayer

creedp

https://www.boards.ie/discussion/comment/120088656#Comment_120088656

Yes but just because motor tax is not hypoteticated does not mean that it doesn't contribute to funding road maintenance. Reality is it forms part of the total tax revenue used to fund public expenditure including road maintemance. Reducing motor tax means other taxes have to be increased to support expenditure including the cost of road maintenance.

I think the issue with the transition to EVs is that the link between use of the roads and cost to the motorist is being greatly erroded. Currently with taxation making up approx 50% of the price of fiuel, their is a strong link between road usage and tax revenue, the more you drive the more you contribute to the upkeep of the roads. This is particularly the case with private motorists who can't write off the costs of motoring, whereas self-employed / business can claim vat back and write off cost of fuel against income, thereby eroding their contribution to the cost of maintaining the roads they use. I live in a rural area and I always hate to see newly surfaced roads torn up by massive agri vehicles exiting from fields onto the road, especially during warm summer weather. I suppose its no worse that seeing utility companies dig up newly surfaced urban roads.

In any case certainly increased road tolls would increase the link between road use and cost to the motorist and would apply to all categories of road users including EVs

slave1

So all the health and other savings from transition to electric vehicles will be ignored?

the_amazing_raisin

https://www.boards.ie/discussion/comment/120089216#Comment_120089216

I don't think they'll be ignored but they will take a long time to have material effect, probably more like 20 years

the_amazing_raisin

https://www.boards.ie/discussion/comment/120088809#Comment_120088809

I think local roads are maintained by the council and should be done so out of LPT revenue

The reality of course is that it just isn't economical to maintain roads in some areas, the population density isn't there and so there needs to be additional funding from the government

I've also seen great examples of new roads getting torn up by heavy trucks and argri vehicles, but you do need to stop and ask the question, if the road was built to spec, and the vehicle in question is roadworthy, then why was the road damaged so badly?

It's quite possible the situation should not have happened in the first place.

I do think there'll be some linkage between heavy road usage and taxation. Maybe it'll be a tax on DC charging, or a special PSO levy on higher powered grid connections, since heavier electric vehicles like trucks will almost exclusively be using those chargers

waterwelly

https://www.boards.ie/discussion/comment/120089216#Comment_120089216

Dubious savings it has to be said.

Our EV's are substantially powered from fossil fuels anyway.

Mined from the ground using diesel, the road they drive on is build and maintained, using diesel.

When one gets stuck on the side of the road, it's diesel that gets us home.

innrain

In a far away future where most of the energy used by households would be electric the charging can be tapered. The first xxxx kWh x% excise, between xxxx and yyyy kWh x+y% and so on. That will incentivize efficient use. Efficient heating, efficient appliances, efficient cars. We already pay the gas bill per kWh and not volume used. It can be harmonized for all fuel types, trow in some green house/pollution levy and you get a comprehensive model. I think something similar was proposed for water chargers and it was shut down so probably won't work :)

liamog

https://www.boards.ie/discussion/comment/120089216#Comment_120089216

I doubt it, the likelihood is any new regime will apply differential rates based on the vehicle. Weight and emissions class will likely be factors.

While tolling doesn't directly benefit the government because it isn't income for them, a more extensive system of tolls that can't be avoided would likely pay for a lot of maintenance of the motorway network. And in turn that means it no longer needs to be funded by the taxpayer

Tolling doesn't have to be a public private partnership, take the example of the East Link bridge, the money from that goes directly to Dublin City Council.

the_amazing_raisin

https://www.boards.ie/discussion/comment/120089499#Comment_120089499

Oh it absolutely doesn't have to be public-private, but I don't see our current government interested in setting up any new state run enterprises

liamog

https://www.boards.ie/discussion/comment/120090554#Comment_120090554

It wouldn't be a state run enterprise if it was a replacement for current motor tax and fuel duty, it would just be an alternative mechanism for collecting tax based on km's travelled. No doubt the actual running of it would be outsourced.

PaulJoseph22

https://www.boards.ie/discussion/comment/120086475#Comment_120086475

Didn't The Green Party encourage everyone to buy diesel, I never bought or drove a diesel in R.O.I. until the Green Party incentivised us to do so, laughable really... We no longer use diesel.....

liamog

https://www.boards.ie/discussion/comment/120093675#Comment_120093675

If all your focused on is reducing CO2 emissions then Diesel was a much better option at the time than petrol. You might remember the international conspiracy by auto makers to hide particulate emissions from diesel engines. The bigger question should really be why the government of 2015 didn't change the diesel advantage when the problems with particulate emissions became apparent.

the_amazing_raisin

https://www.boards.ie/discussion/comment/120094031#Comment_120094031

When you've dug yourself into a pit then you may as well keep digging I guess

To be fair to the government, I can see why they didn't raise taxes on diesel straight away. A lot of the general public got super as well and is it right they get punished for being lied to?

I do think they could have rolled back some of the cheaper taxes and matched diesel prices to petrol quicker to at least make diesel vastly less appealing

creedp

https://www.boards.ie/discussion/comment/120094031#Comment_120094031

Would thatatne have been influenced by the fac that modern diesels are actually pretty clean?

https://www.thisismoney.co.uk/money/cars/article-6733271/Are-diesel-cars-really-dirty-Tests-reveal-models-produce-zero-NOx-emissions.html

However, the Govt did introducea Nox levy for private motorists to ensure that older and more dirty diesels would no longer be imported from UK unless of course it was commercial which could continue to be imported and chug awaye

KCross

https://www.boards.ie/discussion/comment/120085482#Comment_120085482

km based tolling is definitely being considered anyway.

This is probably a kite flying article, but for sure its being considered as a possible solution across the entire road network (not just motorways)

https://www.irishexaminer.com/news/arid-41046686.html

Red Silurian

https://www.boards.ie/discussion/comment/120099032#Comment_120099032

As far as I'm aware, and I am open to correction on this, existing roads can't be tolled under EU rules, only new ones... In saying that the UK, while part of the EU, introduced "congestion charges" on existing roads in London and Durham so I'm thinking this fact might not apply

the_amazing_raisin

https://www.boards.ie/discussion/comment/120099032#Comment_120099032

Project Bruce... it's made me think of the main character from Irvine Welsh's novel Filth

Probably not the best association 😂

zg3409

In terms of tax per km, all new cars have emergency calling which requires GPS and a phone SIM. Indirectly they all have some sort of position logging system and so in theory it would be possible in 10/15 years for all cars to report the location and distances driven over mobile phone l, which could be used for a city and rural per km tax.

Existing smart meters report usage every 3 minutes and existing systems "guess" and report usage on websites such as washing machine, lighting etc, just based on usage data without knowing exactly what was turned on. While people could bypass esb meters, very few do, so it works good enough.

General motor tax or vrt or fixed annual taxes work well in terms of they are easy to collect, don't vary and so are predictable and they often don't help reduce consumption, as in I have paid my 1000 euro motor tax why take the bus instead I should drive to local sweet shop for the newspaper.

As said we used to tax based on engine size, which created odd engine sizes such as 1.999 litre instead of 2L, and small engines with unusually high power outputs and now engines designed to produce low emissions during a fixed test but still produce high performance during hard pedal pressed. I laugh at saying we now have clean diesel, while emissions are not measured while the DPF is regenerating and burning off soot. It's like measuring a humans CO2 while they hold their breadth.

The green party seems anti car even EV, and ideally we want people driving small efficient EVs and charging overnight on green power. We also want cars to last a long time. Fixed annual costs like motor tax are not great to reduce number of driving trips. Time of purchase taxes like vrt can help encourage people to buy the better cars such as small and EV.

Usage such as diesel taxes do encourage people to switch to EV where usage costs are less. .

It's also a political issue, targeting rural Ireland, targeting low income commuters, targeting rich EV owners such as the hate towards big BMW SUV drivers or those buying 100k EVs getting supported.

Politicians are very careful to not stick their foot in it or blame "Europe"

slave1

Will never happen, rural (think outside Dublin/Cork maybe Galway) Ireland has sh1te pubic transport options or none at all, we need our cars to make a living so majority of TD's will be saying no to this else risk non-election.

liamog

https://www.boards.ie/discussion/comment/120166022#Comment_120166022

I don't think this comment is going to age well. We already have road usage taxation by applying it as excise duty on fuel. This will have to be replaced.

unkel

Road use taxation is inevitable in the long run really, but it's a nasty system as it requires a lot of admin to administer, unlike fuel excise, which is relatively simple with a relatively high yield

slave1

..and therein lies the problem....

let them come up with an economic solution so, easiest starting point if we are looking at fuel is excise on public charging, but then how do they tax home charging? If they look to ODO readings then lots of folk will be spinning it back with software and what about anyone anywhere near the border who can legitatemly claim out of state travel

"they" don't have the imagination to come up with a workable system that will be both economic and politically acceptable to the masses

creedp

https://www.boards.ie/discussion/comment/120166022#Comment_120166022

In fairness all of these political concerns existed prior to the birth of EVs. It didn't stop politicians, including rural politicians, supporting the introduction of punative VRT and motor tax and fuel duties for private motorists. No reason why these taxes, other than fuel duties, can't equally be applied to EVs.

Now, of course, a proposal to increase duty on green diesel would undoubtedly result in the immediate fall of a Govt. Some shouts remain louder than others

liamog

https://www.boards.ie/discussion/comment/120166916#Comment_120166916

Why would an Irish politicians imagination come into play, all the discussion around road usage pricing is being done at a transnational level via institutions such as the EU and UNECE.

There was directive on it just last year.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022L0362#:~:text=DIRECTIVE%20%28EU%29%202022%2F362%20OF%20THE%20EUROPEAN%20PARLIAMENT%20AND,of%20vehicles%20for%20the%20use%20of%20certain%20infrastructures

slave1

...and how did the water meters go......