New taxes rather than new solutions – the AA opposes the new car parking space levy

The AA has come out against the proposed new tax on people who have a parking space at their place of work. The measure was included in the recent Finance Act. While the tax is supposed to be environmentally motivated it will in fact be a complex and unfair mechanism for hitting car users who do not have a choice to use public transport.

Conor wrote an article in the Irish Times recently which gave the reasons why the AA felt the new tax was not a constructive measure. Here is a synopsis of the points he made.

The new tax will raise up to €10 million per annum; the eight cents per litre excise duty increase on petrol will yield 20 times that amount. Collecting the levy will be extremely complicated and bureaucratic but the major problem is that it will affect many people who do not have a realistic public transport option.And we come, inevitably, to the Catch 22 of the car use versus public transport debate. You simply cannot get people to switch to public transport that does not exist. The AA has made this point many times but it’s worth making again. The public transport deficit in Irish cities is astounding, yet anti-car policy makers persist in pretending that motorists have a choice when they do not.

In Dublin city centre each day 40% of commuters are in cars. Only 27% use public transport, and even at that the buses and trains are stuffed full. Those figures are outlandish, and the regional figures are even worse. In every other city in Europe the spilt is more like 8 to 1 in favour of public transport. Ask any driver in a two-hour commute through our strangled traffic system whether they would take a train if he could. Of course they would, without the need to be forced.

The AA is happy to support measures that are genuinely constructive, like the proposed tax incentive for employers who provide cycling equipment for employees. This is an entirely benign and helpful measure which is likely to encourage more people to cycle and more employers to provide for them. This will at least attempt to do some good and will hurt nobody. The parking levy has no such environmental upside. When you add cost to someone who does not have any choice it simply becomes a dead weight tax on working. From any rational, practical or environmental point of view this is a very poor idea. Let's drop it and do something useful instead.

Some FAQs about the Car Parking Levy:

  • Q   What is the Car Parking Levy?
    A   Announced by the Minister for Finance in Budget 2009, the levy is a charge on employees for the use of car parking facilities provided by the employer in designated urban areas. A flat rate of €200 will apply per annum.
  • Q   Who is liable to pay?
    A   Each employee who has an entitlement to use a parking space supplied by his or her employer is liable to pay the levy.
  • Q   To which areas will the levy apply?
    A   The levy will apply to employer-provided parking facilities in the major urban centres of Dublin, Cork, Limerick, Galway and Waterford. The specific areas in which the levy will apply will be designated by Order of the Minister for Finance following consultation with the 5 city councils.
  • Q   How will the levy be collected?
    A   The employer will deduct the levy from the employee through the payroll system and return the levy to Revenue. Deductions of the levy will be spread throughout the year in line with the frequency of salary payments.
  • Q   When will the levy start?
    A   The levy is provided for in the Finance Bill (published November 20 2008) and will be introduced by Order of the Minister for Finance.