To: The Minister for Finance
Increase Sales Tax on Heavy Vehicles
We are proposing a surchage of €15 per additional kilogram to the retail price of a new non-commercial car whose curb weight is over 1700kg. Fully electric vehicles would instead see a surcharge of just €5 per additional kilogram to further encourage the switch to electric vehicles.
Image Data Source: International Energy Agency
Image Data Source: International Energy Agency
Why is this important?
Background:
Statistics from the Society of the Irish Motor Industry indicate that over 50% of new petrol and diesel cars, bought in 2023, were SUVs [1]. According to the Financial Times, sales of SUVs in Ireland are amongst the highest in the EU [2]. These vehicles, largely driven in urban areas, contribute disproportionately to greenhouse gas emissions, air pollution, and traffic congestion. Their larger size and weight result in increased fuel consumption and road wear, further exacerbating these issues. Their electric counterparts, due to their excessive size are contributing to global shortages of critical metals such as lithium, causing significant environmental degradation & reshaping global politics. Crash data from Belgium from 2017 to 2021 also shows that a 10cm increase in the height of vehicle fronts raises the risk of death by 30% when a car hits a pedestrian or cyclist, according to a study by the Vias Institute, previously the Belgian Institute for Road Safety [3].
By imposing an additional VRT on the sale of non-commercial heavy vehicles, we can encourage manufacturers to stop increasing the size of their cars, and incentivize consumers to choose more environmentally friendly options, such as smaller, more fuel-efficient cars or public transportation. This would help to reduce our carbon footprint, meet our legally binding climate targets and improve air quality. A higher VRT on heavy non-commercial vehicles is a necessary and effective measure to protect our environment and promote sustainable transportation and public health improvements.
“The Irish transport system is car dependent by design, is high in greenhouse gas emissions and does not support improved well-being.” — OECD 2022 report
Promoting Equity: By taxing non-commercial vehicles that disproportionately contribute to emissions, a sales weight tax could create a more equitable system where the costs of environmental damage are more fairly distributed between urban and rural dwellers. This could free up resources for other groups such as farmers to be rewarded for investing in sustainable practices.
Statistics from the Society of the Irish Motor Industry indicate that over 50% of new petrol and diesel cars, bought in 2023, were SUVs [1]. According to the Financial Times, sales of SUVs in Ireland are amongst the highest in the EU [2]. These vehicles, largely driven in urban areas, contribute disproportionately to greenhouse gas emissions, air pollution, and traffic congestion. Their larger size and weight result in increased fuel consumption and road wear, further exacerbating these issues. Their electric counterparts, due to their excessive size are contributing to global shortages of critical metals such as lithium, causing significant environmental degradation & reshaping global politics. Crash data from Belgium from 2017 to 2021 also shows that a 10cm increase in the height of vehicle fronts raises the risk of death by 30% when a car hits a pedestrian or cyclist, according to a study by the Vias Institute, previously the Belgian Institute for Road Safety [3].
By imposing an additional VRT on the sale of non-commercial heavy vehicles, we can encourage manufacturers to stop increasing the size of their cars, and incentivize consumers to choose more environmentally friendly options, such as smaller, more fuel-efficient cars or public transportation. This would help to reduce our carbon footprint, meet our legally binding climate targets and improve air quality. A higher VRT on heavy non-commercial vehicles is a necessary and effective measure to protect our environment and promote sustainable transportation and public health improvements.
“The Irish transport system is car dependent by design, is high in greenhouse gas emissions and does not support improved well-being.” — OECD 2022 report
Promoting Equity: By taxing non-commercial vehicles that disproportionately contribute to emissions, a sales weight tax could create a more equitable system where the costs of environmental damage are more fairly distributed between urban and rural dwellers. This could free up resources for other groups such as farmers to be rewarded for investing in sustainable practices.