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VAT to be applied to increase toll prices on State-owned motorways

By Laura Anderson

Hard-pressed motorists and hauliers could face toll price increase of 60% on the M50 and Dublin Port Tunnel.

The news came after a ruling by the European Court of Justice said that VAT should be applied to tolls on Stat e-owned motorways.

if the change is implemented, M50 tolls could increase from €2.10 to €2.50, or from €2.60 to €3.20 for a driver with a video account.

The Irish Road Haulage Association has expressed opposition to any toll price increase.

“The recovery is not such that we can sustain what we’ve suffered in the recession, never mind anything that can levy us with increases in what we do”, said Verona Murphy of the IRHA.

“Every time there’s an increase in something to do with transport, the consumer is ultimately the one that suffers.”

In past years TII tolled roads have absorbed the cost of VAT

This dispute first sparked in the 2009 when the private car park operator took Ireland to court with the accusation that the State failed to correctly fulfill the VAT directive.

His claim was that Ireland needed to pressure local authorities to impose VAT on fees to use public car parks, which allegedly skewed competition by allowing local authorities to charge cheaper rates.

in 2008 the National Roads Authority (now Transport Infrastructure Ireland, or T11) took over the M50 and claimed to have received confirmation from the Revenue Commissioners that VAT was not applicabke on any of the T11’s tolled roads.

In the 2010 however, following the car parks ruling, Revenue instructed T11 to apply VAT on the M50 and Port Tunnel regardless.

The AA has come out in strong disapproval of the ruling, urging on their website that “Motorists cannot be expected to bear the brunt of additional charges.”

In past years T11 has absorbed the cost of VAT says Barry Aldworth of the AA.

“The potential addition of VAT to toll prices at state owned facilities would only place a further, unnecessary burden on motorists already struggling with increasing motor insurance premiums”.

Certain insurance reforms proposed by the AA claim to have the ability to minimise the crisis should they be made by the Government.

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