Tax hike for bigger cars in Irish budget

Planned taxes on company car parks, energy, fuel, postponed for at least a year

A restructured tax system that will penalise those buying larger cars was the most significant green measure announced in the annual budget statement presented by Irish finance minister Charlie McCreevy yesterday. Proposing a vehicle registration tax system based on three engine sizes rather than two as under the present system, Mr Ahern said the measure would increase private motorists' contribution to road infrastructure and environmental costs. The move has angered motoring organisations, who said it would significantly hit sales of new cars from next year. The government also proposed tax incentives to promote "park and ride" schemes and reduced the duty on liquified petroleum gas (LPG) sales for cars. But it has deferred decisions on a plan to tax employers for providing company car parking spaces and to introduce general taxes on energy and fuels. Noting concern that energy taxes might contribute to inflation and affect those on low incomes, Mr McCreevy said that nonetheless an indirect tax policy would be necessary to meet Ireland's obligations to cut emissions of greenhouse gases. The government also approved I£500,000 (Ecu634,000) for a campaign to raise public awareness of sustainable development.

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