[article] Yet another VRT story

mike65

From sunday times

IRISH car-buyers are being charged up to €8,200 more than their EU counterparts for the 10 leading models, a Sunday Times analysis has found.

Because of vehicle registration tax (VRT), the biggest-selling cars in Ireland are on average €3,000 dearer than in the 11 other eurozone countries.

The study found that within the eurozone, Irish car-buyers pay the most for five of the most popular vehicles, and the republic is second or third dearest for the other five models in the top 10 list...

...The Toyota Corolla is the best selling car in Ireland, according to statistics compiled last December. EU figures show that a 1.4 litre version in the republic sells for €21,260. The same car can be purchased for an average of €16,562 in the eurozone and is on offer in Germany for just €14,550. It costs €14,621 in Italy, €15,167 in France and €15,195 in Spain.

The Toyota Avensis is the No 2 seller in Ireland, where a 1.8 litre model costs €27,220. The average price in the eurozone is €22,900. In Italy the model sells for €18,980, €8,240 less. It’s slightly more expensive in Finland and Portugal than in Ireland, but is cheaper at €19,485 in Spain and €19,649 in France.

A 1.6 litre Ford Focus costs €22,275 in Ireland, compared with €16,018 in France, and is on average €4,013 cheaper in the rest of the eurozone. The Volkswagen Golf is €18,037 in Ireland for a 1.4 litre model, compared with €14,525 in Greece and an average of €16,058 across the zone...

Cyril McHugh, chief executive of the Society of the Irish Motor Industry said: “When VRT was introduced 12 years ago it contributed €196m to the exchequer. Now this figure is almost €1 billion, yet there has been no let up on the car-buyer. We want a reduction and ultimately we want the tax to be abolished.”

Motoring groups argue that the tax limits the size of the Irish car market, and VRT means Irish motorists do not get the same level of equipment in their cars despite paying more. In some cases safety equipment, standard in other EU countries, is optional in Ireland to keep the price of cars down.

full article here

Okay nothing new but I post it for your "considered" views!

Mike.

Thumper Long

Meh.......... Scandalous :eek:

Our man in Havana

From yesterdays SUN:

"Bertie needs a slap says Mr. Pussy"

Victor

It’s slightly more expensive in Finland and Portugal

Odd they don't say how much. :rolleyes:

We want a reduction and ultimately we want the tax to be abolished.”

Won't someone think of all the impoverished car salesmen! :rolleyes:

Banjo013

It'll never happen - we'll always have this tax.

I can't remember the details exactly, but VRT was introduced when some other tax was abolished because of EU rules, I think it was import duty or something.

In my view the only thing that'll force the Irish government to abolish VRT is a directive from Brussels. If that happens there's no reason why they won't pull the same stunt again - replace VRT with something else that gets around the EU regulations.

If you think about it they've got no choice really. I have no idea what the annual tax take from VRT amounts to, but take the Sunday Times article figure of €1bn. How are they going to plug a big hole like that in the nations finances ? Whether they wanted to or not, the Irish government and Ireland as a nation could not withstand that kind of impact on the wallet. It would have to come from somewhere else - probably health or education.

Yes VRT is a bi*ch, especially when you read what other pople in the Eurozone are paying for their cars. But it's here to stay I think, so we may as well divert our attention to other things that we might have some chance of getting - like better roads for example, or a couple of signposts here and there to let us know where we're going.

mike65

Banjo thats defeatest talk and we'll not allow it here!

VRT replaced excise duty - back in 1990-91 when the brave new world of the single market was comming into view Gay Byrne quipped "don't worry they'll invent a steering wheel tax or something" how right he was.

If you need to rebalance your tax income you'll always find a way. I'd suggest stop wasting money in the first place but that may be too radical! The best way foward and proberly the most controversial would be to tax use of the car not ownership. "Pay-as-you-go" a la the UK proposals anyone?

Mike.

Funxy

Its completly terrible how the irish goverment gets away with so much. The article dosnt surprise me in the least though. They also make it so complicated to import a new vehicle into this country that in the end its hardly worth the few pennies it may save. Ive heard so many horror stories of people being quoted one price before the vehicle enters, then once its here and they give it the once over they can basically charge any price which you will have to pay for them to release it. I really hope the EU comes down hard on the goverment in the future as thats the only way they'll change their ripping off ways. Its a bit of a joke when you think that the goverment are meant to be working for us on our behalf :mad:

jayok

I agree with most of the comments of the VRT system, but I think we need a better approach to the tax. It cannot be argued that we would be better off without the €1 billion is tax revenue as a nation, as this allows funding of other social systems that are required. Equally I don't think that the government will ever stop "wasting" money, as by its very nature the government is inefficent and wasteful (but that's another debate). But what we do need to do is change the way that the revenue from VRT is applied. I have a BIG issue with distributors here stipping out essential safety systems (e.g. airbag curtains, braking stability stuff, etc) to keep the costs down, and I blame the tax.

If the government needs to tax the car then fix the amount of tax for each engine class regardless of the extras! So say for a 1.4 the tax is €6,000 to register, for a 2.0 tax is €12,000 or whatever. This means that maufactuers of say 2 litre class cars can compete directly without the tax obscuring the costs of the car.

Additionally, I would also like to see the price of the car broken down as

Car 1.4 SE model = €10,000
TAX = € 8,000

---

Purchase Price €18,000

So people really know about the car costs and can compare costs of each car directly. But the chances of this happening are slim

Mailman

SIMI are doing some window dressing here.

They claim to be protesting on behalf of the consumer but in fact they are quite happy with the way VRT is imposed as it prevents competition from the UK. SIMI is a mouthpiece for motor distributors who make millions of profit out of absence of cross-border competition. Remember VRT only works because of the motor distributors complicity in that they supply OMSP of vehicles to Revenue. If they didn't supply OMSP to Revenue or made even a half-hearted attempt to retain this information then the VRT system would collapse. VRT is what prevents dealers from setting up in Newry and profitably selling UK fleet cars secondhand into the Irish market.

Abolishing VRT would be partly self-financing:
1) All these jerks resident in Ireland driving round in foreign cars would have no motivation to purchase outside the country as they could source cars equally cheaply here. Jerks are not necessarily non-nationals.
2) More cars are sold on which VAT, Motor Tax and Motor Insurance levy are collected.
3) If someone has a loan for 16,000 to spend on a car they will still spend 16,000 but buy a better car so VAT take will not necessarily collapse.
4) Usage based tax can be implemented e.g. Petrol and Diesel increased in price to match UK - no more Gardai patrolling the border and no organised criminals draining money out of the economy by smuggling fuel. Get rid of agricultual diesel at the same time and replace with a tax allowance for farmers which requires practically no administration.
5) Road accidents which have a financial and social cost decrease as people replace older unsafer cars with safer modern cars.
6) Salary of staff in the VRT office no longer needs to be paid and number of civil servants we have to support is decreased through natural wastage.

DubTony

Mailman wrote:

If someone has a loan for 16,000 to spend on a car they will still spend 16,000 but buy a better car so VAT take will not necessarily collapse.

The thing is that someone will spend the €16,000 on a what would most likely be a bigger car, so one could expect higher insurance, road tax, and running costs. The reason cars like the Nissan Micra are so popular here is because they're relatively cheap and inexpensive to run.
Average Joe can't buy anything bigger, because he can't afford the running costs of anything bigger.

There are also too many vested interests to abolish VRT.

As mailman stated, car dealers basically control how much VRT is on a vehicle by giving the open market selling price information to the government. It suits them to have huge amounts of tax in the selling price of a vehicle, as they receive kickbacks from finance companies. Would you rather get a small percentage of €15,000 or €20,000.

Banks and finance companies. The more a car costs, the more interest they collect.

Second hand car dealers. Offer buttons when buying a car and sell on based on mileage, age, and the OMSP of a new model.

Insurance companies. It costs more to insure a 20,000 car than a 15,000 car.

The government. Not just the VRT on the initial sale. But VAT on subsequent sales. Insurance levy of (is it) 2%. Take it even further, banks and insurance companies make profits on the financing and insuring of cars. The more profit they make the higher the tax take.

The billion a year is buttons compared to the real tax take. As for selling a car with the tax shown (like in the U.S.), well VAT is required under EU law to be included in the retail price, (For included, see HIDDEN). so it's easy for the government here to insist that VRT is applied the same way.

It's here to stay guys, in one form or another. But I think we can all be sure that the average car buyer will never really be aware of how much VAT and VRT is hidden in the cost of that shiny new car.

DukeDredd

I think if the consumer was to buy the car first and then had to go and get it registered themselves AND pay the VRT i think we would see an uproar from the public then. People just accept the tax now because it's lumped in with the price of the car.

unkel

Mailman wrote:

SIMI are doing some window dressing here

My thoughts exactly when I read the article yesterday. Sound post BTW, Mailman

ando

DukeDredd wrote:

I think if the consumer was to buy the car first and then had to go and get it registered themselves AND pay the VRT i think we would see an uproar from the public then.

Yea totally agree there. Just checked on the VRT website for a car I'm interested in the UK. €4500 will go to VRT if I was to import a car that I bought for €11950. It’s so frustrating

DubTony

A few years ago I bought a Mitsubishi FTO and through various web sites found out there was an owners club being formed here. After a few meetings (sessions) one of the lads suggested that we should be pioneers in the fight against VRT. We should protest on the Dail and lobby politicians. Some of the fellas were really gung-ho about it until one of lads put it this way.

"I can see it now. Outside the Dail with banners and signs and giving out about VRT. Just imagine how much support 20 blokes in Mitsubishi FTO's are going to get from the public. "

DukeDredd

I can see it now. Outside the Dail with banners and signs and giving out about VRT. Just imagine how much support 20 blokes in Mitsubishi FTO's are going to get from the public.

Sad but true. It was like when MIJAG decided to have "go-slows" around the cities to raise awareness of the price of insurance for young drivers but the only people that took part were the boy racers. It ended up doing them more harm than good.

mike65

The only way to kill the tax is not to buy cars for a given period. But of course that would jepodise thousands of jobs. The b'astards have us over a barrel of Brent Crude.

Mike.