GRTU seeks reform cut off date to stop car sales stagnation

The GRTU has urged the government to set a cut off date for the vehicle registration tax reform, with the new tax regime being backdated so that the current market stagnation could stop.

The association, which includes new and second hand car importers among its members, said that the current stagnation was such that the government itself could lose €7 million in lost revenue over three months.

It said this problem stemmed from a number of issues which had been allowed to fester, including EU concerns over emissions and World Trade Organisation (WTO) rules which prohibit the existing tax regime of a minimum taxation on second hand vehicles. It does not prohibit registration tax but it prohibits the minimum clause and it should be a taxation based on the value of the car.

Furthermore, the current tax regime was one of the highest at 75%. In addition the high rate of VAT, at 18 percent, was also charged on the regisration tax, the GRTU observed.

It is proposing that cars which exceed an emissions benchmark should be charged an addition tax on the basis of the value of the car.

It warned however that the removal of the total tax regime would be very harmful as consumers and auto dealers would have their cars devalued.