CHANGES to the motor tax system could form part of a Budget package aimed at speeding up the transition to low-emission vehicles.
A series of long-term measures are under consideration ahead of Budget 2018, with a focus on incentives to encourage a change in driver behaviour.
The Irish Independent understands initiatives are being planned in particular to encourage the purchase of second-hand electric vehicles.
A source said: “Motor tax has been a very successful tool in the past for modal shift.
“It can be used to encourage people to move to low emission or zero emission cars.”
The Department of Transport has already laid out a policy ambition to have all new cars and vans sold in Ireland to be zero-emissions capable by 2030, with a further aim to decarbonise transport by 2050.
“Budget measures have to be used to incentivise that shift to take place,” said a source close to the Budget negotiations.
“There are lots of things we’re looking at in terms of getting people to commute less distances, improving public transport and buying more fuel-efficient vehicles.”
Relief on Vehicle Registration Tax for the purchase of hybrid electric vehicles and plug-in hybrid electric vehicles is currently in place until the end of next year, but this is likely to be extended.
Meanwhile, Health Minister Simon Harris has said he believes the sugar tax should aim to change eating habits rather than generate income for the Exchequer.
The levy on sweetened drinks is due to take effect next April to coincide with the introduction of a similar charge in Northern Ireland.
“As Health Minister I want to see a sugar tax that changes behaviours rather than generates income.
“What we’ve already seen is a number of our companies move toward reformulation, towards actually producing food with less sugar content,” Mr Harris said.
“We’ve seen this right across Europe.
“When I meet counterpart health ministers across the EU we are seeing where a sugar tax is introduced more and more companies are producing products with less sugar.
“So, from my perspective, perhaps the Department of Finance might have a different view, I don’t want to see a sugar tax bringing in significant taxation – I want to see it actually changing behaviour and changing the content.”