Non-tax measures such as congestion charges, low-emissions zones and remote working policies could achieve the same objectives as a car parking levy in a more “efficient” and “equitable” manner, according to the Department of Finance.
Finance officials have recommended not implementing a car parking levy at present after a review of such proposals included in the Tax Strategy Group (TSG) papers.
The review comes in the wake of the Commission on Taxation and Welfare (COTW) and the Climate Change Advisory Council (CCAC) separately made recommendations relating to a parking duty or levy in recent years.
The TSG papers outline how legislation from 2008 – which was never implemented – allows for a €200-per-year flat-rate car parking levy to be paid by an employee where a space is provided by an employer in an urban areas – Cork, Dublin, Galway, Limerick and Waterford.
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They note that in 2022 the COTW recommended the introduction or an additional duty on non-residential parking that would not be limited to employer-provided car parking in key urban areas identified as suitable for congestion charges.
The commission said this duty could be combined with congestion charges to strengthen the disincentive to drive a vehicle into urban areas where alternative transport options were available.
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Separately the CCAC 2023 annual review recommended that the Government’s “Moving Together” strategy for improving the efficiency of Ireland’s transport system should use proven approaches to drive behavioural change including road pricing like congestion charges and the implementation of the car parking levy.
Under the draft implementation plan for the Moving Together strategy, the Department of Finance was to review the existing legislation on the car parking levy and examine tax-based options.
The Department of Transport meanwhile was to develop and evaluate non-tax options to disincentivise workplace parking.
The TSG papers outline how the 2022 Census found there is “heavily reliance on private cars for travel to and from work” nationally with cars used by 59 per cent of commuters.
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The document assesses issues and opportunities related to a car parking levy.
It said that “although the environmental objectives of the car parking levy remain sound and valid, a big impediment to achieving those objectives is the lack of a fully co-ordinated and widespread public transport system in Ireland”.
It also said “a key consideration and risk in implementing a new levy is public acceptability, a new charge on car use could be viewed as grossly unfair to many workers”.
The document also said that it was “possible that a car parking levy would disproportionately impact women compared to men” pointing to various pieces of research showing that women rely more heavily on private cars.
The review includes several options relating to a car parking levy or its alternatives.
Under the heading “do not implement the car parking levy”, it says: “A car parking levy would be difficult and time-consuming to implement in Ireland and would require further periods of planning, expert advice and public consultations.”
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It noted that it took 12 years of consultation and planning before a similar levy was implemented in Nottingham, England.
Under the option of implementing the car parking levy as it is currently legislated for, the TSG papers said: “While it may take some time to introduce” the levy could “potentially reduce congestion”, “assist in meeting Ireland’s emissions targets” and “incentivise greater use of public transport”.
Another option was to implement non-tax measures to achieve the same objectives as a car parking levy with the Department of Finance officials noting that these “may have the potential to do so in a more efficient and/or equitable manner”.
The document provides examples of non-tax measures including congestion charges, road-usage charges, low-emissions zones, increased investment to enable sustainable mobility, remote working policies and direct expenditure on alternative routes or modes of public transport.
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The officials concluded by saying: “Having considered the matter, the Department of Finance does not recommend implementing a car parking levy at this time”.
Meanwhile, the TSG papers on energy and vehicle taxation highlighted how a cut in excise rates for petrol and diesel, introduced by the Government due to a spike in energy prices, has cost the exchequer approximately €1.2 billion between March 2022 and April this year.
The temporary reductions were initially due to end on August 31st, 2022, but were subsequently extended.
The final planned rise to bring excise duties on petrol and diesel back to their old rates is due to happen at the start of August.
Opposition politicians and fuel providers have called on the Minister for Finance to scrap or postpone the planned restoration of the rates next week.
Asked about such demands, and whether it was still the intention to restore the excise rates, a Department of Finance statement on Tuesday highlighted “steady decreases” in the national average retail prices of petrol and diesel in recent weeks.
The Government has legislated for an increase in carbon tax every year until it reaches €100 per tonne in 2030.
It is expected that this year’s increase will see the cost of a 60-litre fill of petrol and diesel rise by €1.28 and €1.48, respectively, in October. Filling a 900-litre kerosene tank will cost €19.40 more from next May.
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