CAR TAX:Owners of larger, more heavily polluting cars will bear the brunt of vehicle registration and motor tax changes introduced by Brian Cowen in yesterday's Budget.
The Minister's decision to change vehicle registration tax (VRT) to an emissions-based system rather than engine size was widely anticipated. The new VRT system, which will take effect from July 1st next year, will see the introduction of an A to G seven-band CO2 emissions labelling system along the lines of the energy efficiency labels for white goods.
The rates will range from 14 per cent to 36 per cent, depending on the car's CO2 emission level.
"This measure is not about penalising people for their reasonable lifestyle choices, it is about providing them with opportunities and incentives," said Mr Cowen.
Existing incentives for certain hybrid electric and flexible fuel cars are being extended to July 1st, 2008, the Minister said. Electric cars and electric mopeds will be exempt from VRT, he said.
Meanwhile, the Minister also announced that motor tax rates are to rise by 11 per cent for cars over 2.5 litres and 9.5 per cent for cars under 2.5 litres from February 1st, 2008.
The AA has welcomed the change of VRT to base it on CO2 emissions rather than engine size, but has expressed its disappointment at the increase in motor tax.