TYNWALD has voted through a 6 per cent increase in road tax – adding further pressure on already squeezed household incomes.
Infrastructure Minister David Cretney MHK told the court: ‘While the department understands that vehicle operating costs are continuing to increase, when general standards of living are not, I am sure members will understand that many highways need to be repaired and therefore it is essential that the income generated from this duty continues to meet inflationary costs.’
Mr Cretney said with the 6 per cent increase, road tax was forecast to bring in revenue of £11,253,277 – and he insisted that ‘every penny’ would go on road maintenance.
‘Anybody who drives on the island’s roads presently will know that there is work required in some areas,’ he said.
The Minister explained that the Vehicle Duty Order 2011 has two aims – to maintain revenue and provide funding for road safety measures but also to address an anomaly that occurred when emission-based duty was introduced in April 2010, which means that two identical cars can be charged different rates of duty.
To address that anomaly, a two phased approach was proposed. Phase 1 to be introduced in 2012-13 will apply to vehicles brought into the island, but first registered elsewhere before April 1 2008, which will move to duty based on engine capacity rather than CO2 emissions – unless the duty based on emissions is lower.
This is estimated to affect more than 2,000 vehicles.
Phase 2 of the process of getting most vehicles on a similar charging basis would be introduced in 2013-14, when vehicles brought into the island, but first registered elsewhere between April 1 2008 and March 31 2010, will be moved to duty based on engine capacity, unless the duty based on CO2 emissions is lower.
Mr Cretney said: ‘The department appreciates that this is not the ideal time to be reducing overall income by addressing this anomaly of different duties to the same vehicle, especially when the numbers of vehicles being registered and licensed are reducing, but these measures should assist vehicle traders by reducing barriers that currently exist with some ages of vehicle.’
Tynwald voted overwhelmingly to approve the order, with only David Quirk MHK (Onchan) voting against.