DUBLIN: Motor tax on trucks and vans has fallen by as much as €4,000 a year in some cases as new rates announced in Budget 2016 came into force on New Year’s Day.
Minister for Finance Michael Noonan cut the top rate of tax on commercial vehicles to €900 from €5,175 in a move that also simplified the charges paid by hauliers.
Mr Noonan replaced 20 different rates ranging from €333 to €5,175 with just five ranging from €92 to €900.
The move followed last year’s successful Supreme Court challenge by Perennial Freight to the old system which tied tax to the vehicle’s weight.
However, truckers accused the Government late last year of attempting to reintroduce the old system in the closing months of 2015 by passing legislation to plug the gap in the law identified in the Perennial case.
The Freight Transport Association of Ireland argued that the change would only take effect for a number of weeks, before the new rates applied, but would still hit companies obliged to pay tax on their fleets before the end of 2015.
Perennial Freight had successfully challenged a series of offences relating to the unladen weight of its vehicles at the time that they were taxed.
Announcing the changes in his budget speech in October, Mr Noonan said the new charges were interim rates pending the replacement of the old system with a “fairer” basis for calculating commercial motor tax.
The Republic’s commercial motor tax charges were higher than those of the UK and other European countries.
Minister for Transport Paschal Donohoe welcomed the introduction of the new rates.
“These changes come into effect from today and will save many hauliers over €4,000 per year,” he said.
“These changes will benefit over 28,500 commercial vehicles.”
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