With vehicle prices, fuel costs and car insurance premiums remaining low, the Government are being urged to act quickly to try to stem the flow of falling revenue for new car sales.
In 2007, the Irish Government enjoyed income of '2 billion from the motor industry, but this number had fallen to '1.5 billion for 2008 and projected figures show an even more alarming drop to '500 million this year.
The Society of the Irish Motor Industry (SIMI) revealed that sales of new cars fell by almost 70 per cent during January and pronounced that the Irish motor industry was in 'crisis.' Further bad news released by SIMI was the number of imported cars from the UK and Northern Ireland had grown, sparking fears of further job losses within the industry to go with the 3,000 already lost in the past three months.
Director General of the Society of the Irish Motor Industry, Alan Nolan, said that the Government had to introduce urgent measures to safeguard up to 50,000 jobs and rescue the fall in sales of new cars. SIMI have proposed the introduction of a car scrapping scheme to remove all vehicles that are over 10 years old, in order to replace them with a newer, safer and cleaner fleet of cars.
Mr Nolan would also like to see a strengthening of the enforcement against dealers and motorists who are not paying the Vehicle Registration Tax (VRT) on imported cars. Dealers are also incensed that under current legislation, they are being asked to pay VAT on all transactions, even if they end up making a loss. This has been described as an 'unacceptable burden' by Mr Nolan who insists that changes to the VAT regime would be self-financing and not bring any further costs to the state.
If a dealer were to purchase a car for '15,000 and sell it on for '10,000 at a loss of '5,000, they would still have to pay VAT on the full '15,000 that the car was bought for initially. Ireland is presently the only country in the EU that imposes a VAT charge on a transaction that produces a loss.
SIMI have also claimed that it is 'unfair' that dealers are expected to enforce the VRT regime, which involves tax being paid to the Revenue Commissioner for imported cars based on their market value. They believe that rules on re-registering imported cars should be enforced and illegal roadside car dealers flushed out by Revenue.
About the Author:
Rochelle Martinez, Freelance Web Content Article Writer for three years.
