SIMI: Reaction to Budget 2012


Alan Nolan, Director General of SIMI says, “We are very disappointed atthe decision to implement the VAT increase on the 1st of January. We had madethe case to defer the increase until after the first quarter peak-sellingperiod when more than half of all new cars are sold.  We had also pressed for improvements to theregistration plate system, to address our acute seasonality in sales, which westill believe should be implemented even at this stage.”

For those with pre 2008 cars, annual Road Tax will go up by 7.5% whichworks out at an average of about €35. For those who bought after 2008, the CO2based Road Tax will increase by 7.5% for all bands except A, B and C whichincrease by €56, €62 and €28 respectively.

“Obviously with the leaks over recent weeks, we were not surprised atthe Road Tax increases, but it is hugely important that the environmentalincentive to buy a new car still remains in place. While we don’t welcome theseincreases, a motorist who chooses to purchase a low emitting car next year willstill see economic benefits relative to cars road taxed under the previous ccbased system.”

“We still have concerns that VRT and Road Tax are facing further focusin next year’s Budget but in this regard we welcome Minister Noonan’s promiseof consultation with the Industry on both these issues in advance of decisionsbeing taken.”

The Minister also announced the introduction of a VRT Export Refund nextyear, in consultation with the Industry. It will allow for a refund of VRT on avehicle on the permanent export of the vehicle to another member state in theEuropean Union.

“Although there is no build up of used cars that would immediately benefitfrom implementation of this scheme at the present-time, nevertheless thisprovision will allow dealers to export surplus used cars or ones that aredifficult to sell.

As a result of the Carbon Tax increase from midnight tonight, petrolwill increase by 1.4c and diesel by 1.6c. However, fromthe 1st of January next year, with the impact of the 2% VAT increase, petrolwill be 3.9c and diesel 4.03c higher, 2.7% more than January last year. For theaverage car that travels 16,000km per year, these fuel tax increases will addan extra €50 to the cost of motoring.

“Compared to Northern Ireland, fuel duties herewill still be lower, however as prices increase, there is always a risk that theproblem of illegal fuel laundering will also increase further.”

Nolan says, “The increase in fuel duty is another unwelcome cost for the motorist.  While none of these increases by themselves mayappear to be a major burden, the combination of these increases will impactvery significantly on motorists.”