I have questioned the manner in which motor tax charges are levied for people who pay in installments.
While paying in installments undoubtedly incurs additional administration work, I believe the rise in online payments for motor taxation should allow the State offset some of these charges.
Most people cannot afford to pay their motor tax for the whole year upfront, especially where their cars are older models with higher emissions, thereby resulting in higher motor tax.
Therefore, people can chose to pay quarterly or half yearly, and may do this using the online motor tax system of payment. Indeed figures released to me show that last year 61.9% of motor tax discs issued were paid for online. In 2011 the figure for online payment of motor tax was 46% which demonstrates that year on year this option is becoming more popular.
I would expect that associated administration costs processing these payments have been reduced significantly as a result of people using the online method of payment.
But for those who pay their motor tax half yearly, there is an additional annual charge of 11% for this, and for those who pay quarterly, the charge amounts to an additional 13% on top of your motor tax.
So many people could be paying an additional €50-100 in administration fees, based on annual tax rate of €700 plus.
I believe this is too high a charge for people who are making regular payments, and I don’t think we can continue to justify these charges in the digital age.
While I appreciate Minister for the Environment, Community and Local Government, Alan Kelly TD’s response to my queries around this, I am disappointed he will not commit to reviewing the charges.
People who have older cars and pay by installments are being hit twice in my opinion through our current motor tax regime. They are firstly paying vastly different motor tax to persons who can afford newer cars, and on top of this they are penalised further for paying by installments.
I think a one off administration fee per annum should be sufficient to cover the additional costs of those opting to pay by installments. The charges could be maintained for those who decide not to pay online, while for the majority I believe that 11% and 13% of an additional charge for those paying by installments is far too regressive a charge. I would suggest a flat 5% fee would be appropriate and in line with other sectors where people opt to pay by installments, such as motor insurance.
Motor tax is a vital component of our taxation system, but we must ensure we are being fair and equitable in the ways in which we collect this tax.
I would encourage Minister Kelly to conduct further research into this area and to reconsider the charges for persons who have no other option but to pay by installments.”