Vehicle Registration Tax (Ireland) - Criticisms

Criticisms

Critics of VRT claim that it is effectively a continuation of the excise duty (which was applicable to vehicles in Ireland prior to 1992) and as such is illegal under European union law. It should also be noted that as it is calculated on the selling price of a vehicle, inclusive of VAT, so is in effect a double taxation. Along with complaints about the very high rate of tax, critics maintain the tax is ineffective in one of its stated aims the reduction of pollution from vehicles because while it may limit the number of vehicles on the road (by making new cars less affordable), it provides a disincentive for owners of older (more polluting) vehicles to replace their cars. As the tax is on vehicle ownership rather than usage there is little incentive for those who do manage to buy a car to ever consider using less polluting methods of transport.

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