Budget fails to sufficiently recognise needs of logistics sector – FTAI

406

Budget 2024 announced by Minister for Finance Michael McGrath on 10 October 2023 offers very little for hard pressed businesses in the freight distribution and logistics sector, according to the Freight Transport Association Ireland (FTAI).

Speaking on the announcement, Aidan Flynn, CEO of FTAI commented: “In Ireland a large percentage of fuel price is made up of taxes and excise duty. To alleviate some the financial pressures, the heavy goods vehicle (HGV) and public service vehicle (PSV) sectors currently participate in a Diesel Rebate Scheme (DRS) which provides a 7.5 cent per litre rebate – dependent on terms and conditions – payable three months after the fuel has been purchased.  Ahead of the Budget announcement, FTAI urged Government to review the scheme to enable greater flexibility, including expansion of the scheme to include the Own Account sector, and improve efficiency, calling for the facilitation of monthly claims and payments. The lack of reference to this within the budget is therefore a disappointing oversight.”

In its pre-Budget submission, FTAI also highlighted that consideration must be given to reviewing the categorisation of Vehicle Registration Tax (VRT) for all electric light commercial vehicles (LCVs). Mr Flynn continues: “We welcome the announced changes to the Vehicle Registration Tax relief for battery electric vehicles – in which the qualifying value has increased to €50,000, and will be applicable to the end of 2025. However electric LCVs are significantly more expensive than conventional diesel vehicles and tend to be valued in excess of €60,000. Currently the VRT of an electric vehicle is generally around 13.3% of the vehicle value, which makes the total price of electric light vehicles uncompetitive. To encourage greater uptake, and to ensure any cost benefits of transitioning to electric vehicles are not lost, FTAI will continue calling for the VRT on electric vehicles to be capped at a rate comparable with their diesel equivalent.”

“While we welcome the news that the planned excise duty increase on diesel is now postponed until April 2024, this budget offers very little for hard pressed businesses in the freight distribution and logistics sector – which like many other sectors of the economy are facing increased financial challenges – and it is clear that there is still more to be done to support the industry charged with delivering Ireland’s goods.”