How much tax does the Motorist pay?

With the budget only days away we take a look at how much tax the motorist is already burdened with writes Geraldine Herbert


How much tax is charged on a new car ?

The Hyundai Tucson is the bestselling car in Ireland this year but how much tax is paid on a new car? If we break it down

Hyundai Tucson Executive 1.7

Selling price – €32,070

VRT –  €4720 (charged at 17%)

VAT  – €5,114(charged at 23%)

So the total amount of taxes paid on this new car is €9,834 or a little under a third of the total price.

VRT CO2 bands

VRT CO2 bands


What is VRT?
Vehicle Registration Tax (VRT) is a tax chargeable on the registration of motor vehicles in the State, and has been in place since 1993. VRT is levied as a percentage of the open market selling price (OMSP) of a passenger motor car. Since 1 July 2008, both VRT and Motor Tax on private motor cars have been calculated on the basis of CO2 emissions, so that motor cars with higher CO2 emissions attracted a higher tax liability.



How much Motor Tax do we pay?
Motor tax depends on CO2 emissions so using the example above the Hyundai Tucson Exec 1.7 has 119g/km of Co2 so it falls in Band A4 and costs €200 a year for Motor Tax.

However if you bought a car prior to July 2008 you are paying motor tax on the engine size of the car. In 2008, the Fianna Fáil-Green Party coalition changed the VRT and motor tax system from one based on engine capacity to the current one based on Co2 emissions. As a result of this change and huge improvements in the performance of diesel cars, sales dramatically shifted in favour of diesel.

Co2 Bands

Co2 Bands

 For example a 2008 Ford Focus 1.6 diesel   is paying €514 a year in motor tax whereas the same car bought the following year   a 2009 ford Focus 1.6 Diesel  is paying just €200.


What about Fuel?
Tax is by far the single largest component of the pump price. This has risen very considerably in recent years. Budget 2017  left taxes on petrol and diesel unchanged. The components are:

Pic from Irish Petroleum Industry Association

Pic from Irish Petroleum Industry Association

  • Excise: per litre, 54.18 cents for petrol and 42.57 cents for diesel (The excise duty on fuel is levied on a per-litre basis and not as a percentage of the price, which means when the cost of fuel falls, the tax remains at the same level.
  • NORA levy: per litre, funds the National Oil Reserves Agency (NORA), 2.00 cent per litre for both diesel and petrol;
  • Carbon tax: per litre, 4.59 cents for petrol and 5.33 cents for diesel;
  • Biofuel obligation: the State obliges oil companies to ensure that 6% of their volume of all motor fuels is from renewable sources such as ethanol or biodiesel. Oil companies meet this obligation in a variety of ways and the blending mix for each product may differ between different companies. The net effect currently is to add about 1.5 cents to a litre of petrol and about 3 cents to a litre of diesel – (to both of which VAT is added at 23%);
  • Better Energy Levy: 0.12 cents per litre.
  • VAT: 23% on all of the above. The amount of VAT therefore rises and falls with the cost of product.
Pic from Irish Petroleum Industry Association

Pic from Irish Petroleum Industry Association


The OECD have recommended at least an equalisation of excise rates on petrol and diesel the UK, already has equalised excise rates on petrol and diesel. A number of countries, notably France and Belgium, have also moved to equalise the excise rate on petrol and diesel. The excise on Diesel in Ireland is currently 22% less than on petrol.




Geraldine Herbert

6th October, 2017

Author: Geraldine Herbert

Contributing Editor and Motoring Columnist for the Sunday Independent and editor of wheelsforwomen. Geraldine is also a regular contributor to Good Housekeeping (UK) and to RTÉ Radio One, Newstalk, TodayFM and BBC Radio. You can follow Geraldine on Twitter at @GerHerbert1

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