Minister confirms expert report will propose changes to motor tax regime for HGVs – Breen

June 26th, 2014 - Pat Breen

Fine Gael Clare TD and Chairman of the Oireachtas Committee on Foreign Affairs and Trade, Pat Breen, has welcomed confirmation from the Minister for Transport, Leo Varadkar TD, that a report to be published next month will propose possible changes to the motor tax regime for the haulage industry. Deputy Breen raised the issue in the Dáil earlier today with Minister Varadkar.

“The Irish Road Haulage Association (IRHA) wants the road tax regime to be changed to a pay-as-you-go system, similar to those in other European countries, because our motor tax rates for HGVs are completely out of kilter with our European counterparts.

“For example, it costs €4,000 to tax a truck in Ireland, while in the North it only comes to £850. As a result, up to a quarter of hauliers have already moved to the North, with an estimated 4,000 registered vehicles in Northern Ireland, Bulgaria, Belgium and the UK.

“To add to that, our international fleet is paying on the double when carrying out international haulage work, by paying road tax in Ireland and then paying a road user charge while in Europe, as well as a £10 levy in the UK. There is a disparity in regimes which means it is now more financially rewarding for hauliers to base themselves elsewhere.

“I was pleased to receive an update from Minister Varadkar on the interdepartmental group set up last January to assess the implications of introducing a pay-as-you-go road tax system for HGVs. According to the Minister, a report from the group to be published at the end of next month will outline a number of options to ensure transport costs do not have a negative impact on Irish businesses.

“The Minister also reiterated the Government’s objective to support the haulage industry, which is essential for our exporting economy. A number of measures have already been introduced to support the industry, such as increasing the speed limit for trucks on motorways, changes to the weights and measures regime and the fuel rebate.

“I hope that the introduction of a pay-as-you-go motor tax system will be the next Government measure to support the haulage industry, and I look forward to reading the

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interdepartmental report in detail at the end of next month.”

Note to Editors:
Please see below the exchange in the Dáil between Deputy Breen and Minister Varadkar

Deputy Pat Breen
Deputy Pat Breen: As the Minister knows, I have been working with the Irish Road Haulage Association, IRHA, and making representations on its behalf to both him and the Minister for Finance. The haulage industry is an important sector to Ireland worth €1 billion a year and employing 50,000 people. We are an island nation and 95% of inward goods are transported by truck. The IRHA would like to see the current road tax regime changed in favour of a pay-as-you-go system, similar to those in other European countries. To add to that, our international fleet is paying on the double when carrying out international haulage work, paying road tax in Ireland and then paying a road-user charge while in Europe, as well as a £10 levy in the UK. There is a disparity in regimes which means it is now more financially rewarding for hauliers to base themselves in Northern Ireland, which has been happening over the past several months. Will the Minister give an update on the working group’s deliberations in advance of the October budget?
Deputy Leo Varadkar: I established an interdepartmental group last January to assess the implications of introducing a pay-as-you-go road tax system for HGVs, in response to concerns

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raised by hauliers about the cost of running a haulage operation in Ireland. In particular, the IRHA believes the current motor tax regime is unfair to hauliers with international operations, which have to pay road-user charges in certain other European countries, and would prefer a system based on time on the road or on distance travelled.
The group is made up of representatives from my Department, the Department of the Environment, Community and Local Government, the Department of Finance, the National Roads Authority, the Road Safety Authority, An Garda Síochána and Forfás. I hope to receive the final report from the group by the end of July. I do not want to anticipate its findings but I can give Members an update on the work to date.
The group has carried out a review of the current motor tax arrangements for HGVs, including the administrative procedures and the tax raised. The group has examined other charges levied on

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the domestic HGV operators, such as tolls and fuel costs, and other charges which hauliers face as business operators, including labour costs. The cost to haulage operators carrying loads outside Ireland has been considered. A full review has been carried out of the road-charging regimes in other European states, including the system introduced in the UK this year. The relevant European Union legislation in this area has also been examined. The group has identified various options for changes to the motor tax regime in Ireland to support the haulage industry and ensure transport costs do not have a negative impact on Irish businesses, particularly Irish exporters who are driving our economic recovery. I look forward to receiving this report later in the summer.
Deputy Pat Breen: I thank the Minister for his fair reply. Obviously, a comprehensive report is being compiled with the various bodies which will identify options and possible changes to the motor tax regime. Up to 25% of hauliers have already gone to Northern Ireland, with 4,000 registered vehicles in Northern Ireland, Bulgaria, Belgium and the UK. We have to stop this because it is causing real problems, with the Revenue Commissioners losing out and other associated costs. It costs €4,000 to tax a truck in Ireland, while in the North it only comes to £850. I welcome the fact the working group will publish its findings by the end of next month and hope it will be positive for the hauliers, as the fuel rebate was.
Deputy Leo Varadkar: I thank the Deputy for his comments. The Government’s objective from day one has been to support the haulage industry. It is essential to an island and an exporting economy that we have an efficient and competitive haulage industry that can get our goods to market, as well as transporting imports and other goods around the country. Several measures to support the industry have been introduced, such as increasing the speed limit for trucks on motorways, changes to the weights and measures regime and the fuel rebate. The industry has been very helpful and progressive when it comes to increasing safety standards, whereas other industries like that in principle but not in practice. The haulage industry has always been willing to embrace improvements to working conditions, tachograph times and improvements to safety. I do not want to prejudge the outcome of the report but I look forward to seeing its recommendations.
Deputy Pat Breen: That was a favourable reply, given the fact that the report will be published at the end of next month. We look forward to a favourable response to the issues in question.