The total yield from energy and vehicle taxes was €4.3 billion in 2023, representing 5 percent of overall tax receipts for 2023. This is according to the Energy and Vehicle Taxation Tax Strategy Group (TSG) paper, published this week by the Department of Finance, with the aim of informing budgetary policy.
In the paper, the Department states that it does not recommend a Car Parking Levy at this time, identifying a number of non-tax measures which could be implemented instead to achieve the same objectives in a more efficient and/or equitable manner. Examples include congestion charges, road usage charges, Clean Area Zones and Low Emissions Zones, ‘Cashing out’, reallocation of road space, increased investment to enable sustainable mobility, remote working policies, and direct expenditure on alternative routes or modes of public transport.
The paper also identifies fiscal measures which could potentially raise revenue for the Exchequer and encourage behavioural change linked with reducing road transport emissions. Proposals include:
- an extension of the VRT relief for battery electric vehicles
- a 1 percent VRT rate increase across bands 11-20 (which would only affect cars with above average emissions), and which is estimated to raise €26 million based on 2023 registrations
- increasing the VRT NOx surcharge by €5 per mg/km, which would raise €15.5 million; and
- certain changes to capital allowances thresholds.
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