Having urged the government to defer the expected two per cent VAT increase until after the peak selling period Alan Nolan, Director General of the Society of the Irish Motor Industry (SIMI), is "very disappointed at the decision to implement the VAT increase on the 1st of January" and still believes that the improvements to the registration plate system that SIMI proposed to combat the seasonality in the Irish motor industry "should be implemented even at this stage."
This reaction from SIMI comes after Minister Michael Noonan announced increases in VAT, annual road tax and Carbon Tax in Budget 2012.
As part of the increases annual road tax for pre-2008 registered cars will rise by 7.5 per cent across the board meaning an average rise of €35. The 7.5 per cent increase is also carried over for the higher bands of CO2-based road tax but controversially bands A, B and C will increase by €56, €62 and €28 respectively. This means that owners of the cleanest cars will pay almost 50 per cent more for their tax in 2012.
"Obviously with the leaks over recent weeks, we were not surprised at the Road Tax increases, but it is hugely important that the environmental incentive to buy a new car still remains in place. We still have concerns that VRT and Road Tax are facing further focus in next year's Budget but in this regard we welcome Minister Noonan's promise of consultation with the Industry on both these issues in advance of decisions being taken."
The Minister also announced the introduction of a VRT Export Refund that will allow for refund of VRT on a vehicle permanently exported to another European Union member state.
"Although there is no build up of used cars that would immediately benefit from implementation of this scheme at the present-time, nevertheless this provision will allow dealers to export surplus used cars or ones that are difficult to sell."