Benefit-in-kind changes
Deputy O'Sullivan criticised planned benefit-in-kind changes for company cars as contrary to environmental goals and costly for workers. The Tánaiste said the matter fell under the Finance Minister and was intended to align tax rules with greener transport choices.
Recent proposals regarding changes to benefit-in-kind are counter to what we as a Government should strive for. The current system rewards people for driving more miles, while we as a society are being told to change our habits and protect the environment. In January, the benefit-in-kind rate is due to increase from 6% to 9%, which means certain car owners will pay thousands of euro more to do their job and go about their business. The percentage paid is calculated on the price of a new vehicle and does not take the trade value of another vehicle into consideration. Will the Tánaiste look into this matter urgently and revert to me in the coming weeks regarding the current benefit-in-kind model and whether it is fit for purpose?
Comment on this
I might ask the Minister for Finance to come back to the Deputy on this, given that it falls under his remit. My understanding is that this was well flagged a number of years ago and is designed to align the benefit-in-kind system with environmental objectives. It was designed to encourage company cars to be electric or low emission and it was well flagged a number of years ago. That is my understanding of it, but I will ask the Minister to get back to the Deputy on it directly.