Does the Irish car industry care about VRT?

Hi,

Do Irish car importers actively lobby the government concerning VRT or does this arrangement actually suit them as some form of protectionism? I realise that VRT denies the Irish consumer choice/ranging/specification and all at higher prices than elsewhere in Europe, but was shocked to read that new cars being imported into Ireland are not being 'offered' with hi-tech safety features as standard (presumably standard in other markets?) because the VRT and VAT added on these safety features makes the cars too expensive!

Martin Smith

Aug 2016 Filed under: VRT

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Expert answer

Hi Martin,

To be fair to the car companies, they would all like to see the end of VRT – there’s little or no protectionist advantage to them (aside from it causing a small, largely ineffective brake on personal imports) and freeing customers from that yoke would make the Irish car industry much more competitive.

As for lobbying against it, that has largely dried up now. Why? Because of the tacit admission that even if VRT could be dismantled, any Irish Government would simply come up with a replacement for it. Even with the Apple tax decision hanging in the air, no Minister for Finance is going to turn off a €4 billion annual tap of combined motoring revenues, of which VRT makes up a a major component.

As for the application of both VRT and VAT to major safety items, you’re quite right – that is a staggering shame, one that should (but probably doesn’t) weigh heavily on the consciences of all in the Department of Finance, the Road Safety Authority and the Society of the Irish Motor Industry. Whether it’s autonomous emergency or a child safety car seat, adding VRT and/or VAT increases the price and makes it less likely that a customer will spend the extra to buy that system, not least because there is no benefit to your insurance premium for doing so.

Mind you, in some ways, Irish customers have only themselves to blame. Back in the early 2000s, when anti-lock brakes were often an option, and not an especially expensive one at that, most buyers shunned them in favour of a sunroof or a better stereo…

Neil Briscoe - Complete Car Advisor
@neilmbriscoe