Phil Hogan, the Minister for the Environment, has confirmed that tax for fuel-efficient low carbon-emission cars in the Band A and Band B categories will rise. In some cases it could go up by as much as 63%.
Motoring lobby group, the AA says it is an unfair tax and will feel like be an act of “bad faith” for those who have purchased new greener and clear cars over the last three years because of the promise of a lower tax bill.
"It will feel like the Government is reneging on that promise and people will not only be out of pocket but also disillusioned and this will make it that much more difficult for the Government to credibly make promises in the future," he said.
The Consumers' Association also criticised the move and said motorists who had responded to the government’s incentives to buy greener cars and were now been given a "slap in the face" .
"Drivers are being overburdened with taxes simply because they can't give away their cars," said chief executive Dermott Jewell.
Mr Hogan told RTÉ's The Week in Politics that there would be "adjustments in the bands and in the rate" of motor tax.
He said Minister for Finance Michael Noonan will have to raise money from motor tax as part of the effort to reduce the budget deficit.
But Mr Hogan said there was no truth in reports that motor tax would rise by as much as 63%.
The increase in car tax will be in addition to the increased cost of petrol because of the rise in VATfrom 21% to 23%.
The AA said this would add 2.5 cent to the cost of a litre of petrol, while an anticipated rise in carbon tax of at least €5 per tonne will add another 1.5 cent.
Meanwhile, Minister for Health Dr James Reilly has said his department will have to endure cuts in the Budget, but final decisions had not been made yet.
Dr Reilly said everything was on the table in terms of cuts.
