There wasn’t much change for the Irish motorist in Budget 2025. The only significant change to any of the motoring taxation rules and regulations was a tweak to the electric commercial vehicles Vehicle Registration Tax, setting that at a flat €200 rate in an effort to encourage EV take up in the van sector while home charging points for company car users switching to an EV have been zero-rated for Benefit in Kind tax.
Carbon tax increase
Beyond that, the only other notable motoring-related change in Budget 2025 was the much-flagged increase in Carbon Tax, which will see immediate increases in the price of petrol and diesel.
According to Fuels For Ireland (FFI), the group that represents fuel importers and retailers at the Government level, Ireland now has the highest rate of fuel taxation in Europe.
Kevin McPartlan, CEO of FFI, told CompleteCar: “Today's Budget claimed to focus on reducing the cost of living but the Government is actually increasing costs on consumer with its measures ensuring that Ireland is one of the most expensive countries in Europe for diesel and petrol. Since this government took office in 2020, the taxes on fuel have soared by 20 per cent, driving a dramatic increase in costs for consumers and businesses.”
According to McPartlan, that means that €1.04 of every litre of petrol goes to tax, while for diesel it’s 93.78c per litre. FFI’s figures show that this means that the average driver will pay an extra €12 per fill-up.
Hurting consumers
“We are calling on Minister for Finance Jack Chambers to convene an expert group to review the current fuel tax system. It must be re-evaluated to ensure it balances climate goals with the need to protect consumers from unsustainable price increases. Our recent survey shows that 80 per cent of motorists agree on the need for this urgent review. We urge all political parties to support the expert group and I hope to see this support reflected in the party manifestos when the election is called. The continuous rise in fuel prices is not only hurting consumers but is counterproductive. It risks destabilising businesses and pushing more families into financial hardship," McPartlan warned.
The fact that the wholesale price of oil has reduced significantly in recent months means that Irish drivers are unlikely to feel a significant pinch straight away, but if oil prices in rise in the face of continued turmoil in the Middle East, that could change fast.
Current grants
Meanwhile, there was broad welcome for the change in electric van VRT. John O'Keeffe - CEO of ePower, a leading Irish company in electric vehicle charging and solar panel solutions - said: “This is a crucial time for Ireland’s second hand EV market and any measures that incentivise growth in this area are very welcome. We know there is great potential to be unlocked, to the benefit of motorists and the environment. This year marks the first time that a Benefit in Kind exemption has been provided for EV chargers at the home of a director or employee, and is a logical next step in promoting the use of these vehicles as company cars. We also welcome the changes in respect of battery electric commercial vehicles that will allow them qualify for the €200 VRT rate. It’s another positive move to promote a switch away from fossil-fuelled transport. Finally we welcome the decision to leave current grant programmes for EVs unchanged. It’s important the government support this evolving business community to ensure its continued growth for the future.”
Missed opportunity
That said, others felt that Budget 2025 was a missed opportunity to try to reverse Ireland’s plummeting EV sales, which fell by another 30 per cent in September. David Savage, vice president for Europe for GeoTab, an electric car and telematics expert company, said: “Budget 2025 represents a missed opportunity for boosting Irish EV sales. On a day where SIMI data revealed that Ireland has seen year-on-year sales of zero emission vehicles decline for seven months in a row, there were hopes that, at the very least, grants towards the purchase of EVs would be restored to their previous levels. Unfortunately these hopes have disappeared in a puff of smoke, with Ireland’s fixation on high polluting vehicles set to continue. While there were some positives such as overhauling VRT categorisation for electric light commercial vehicles in line with calls by FTA Ireland and BIK benefits in terms of company cars and installation of home chargers, there was the opportunity to go further at a time when we need to see a rebound in sales of Electric Vehicles. For example, PwC recommended extending grants to the purchase of used EVs and Irish Rural Link’s pre budget submission called for a grant to help households upgrade their electrics which could support home charging. This is a real missed opportunity as reducing transport emissions is not only a key factor in achieving Ireland’s climate targets, but is also a crucial aspect of improving air quality. The EPA only highlighted last week the key role EVs have in tackling dangerous levels of nitrogen dioxide from vehicle emissions, with Ireland set to miss its health-based WHO air quality guideline targets in 2026.”