Ireland’s representative body for private bus operators, the Coach Tourism & Transport Council of Ireland (CTTC) has called on the Government to extend VAT relief for the purchase of electric and alternatively fuelled buses, as a measure to accelerate transport decarbonisation. Under current legislation, operators are only entitled to reclaim VAT for the purchase of certain tour and other buses, to include those that are fuelled by diesel.
CTTC members currently operate over 2,100 vehicles that service various routes across Ireland; and the association notes that its members remain committed to reducing carbon emissions from transport; and leading the sector towards a sustainable future. Amending the VAT71 regulation to include electric and other alternatively fuelled buses would thus help to alleviate the financial burden of purchasing such vehicles.
In order to advance its proposition, the CTTC has published a policy proposal document, urging the Government to amend the existing VAT71 regulation, in order to:
- Incentivise the purchase of new vehicles – modernising the national fleet and improving efficiency and accessibility in line with manufacturing advancements
Ensure that electric and low-carbon buses are a financially viable option for bus and coach operators
Build on the success of other purchase incentives such as the Alternatively Fuelled Heavy Duty Vehicle (AFHDV) Purchase Scheme
Promote the growth of the electric and alternatively fuelled vehicle sector in Ireland, enabling these vehicles to be produced at scaleRemedy the existing disparity in VAT provisions between Northern Ireland and the Republic of Ireland – VAT relief is currently applicable for electric vehicles used for public transportation in Northern Ireland
In the context of the Government’s ambition to achieve a 50% reduction in carbon emissions from transport by 2030, the CTTC contends thatexpanding the VAT71 regulation to include electric and alternatively fuelled buses, is an effective solution to unlock critical investment within the sector and incentivise operators to transition to zero and low-carbon alternatives. The association further notes that tax relief on alternatively fuelled vehicles – across both commercial and private transport – is a tangible, certified mechanism to promote the purchase of these vehicles.
Speaking on the issue, Chairperson of the Coach Tourism & Transport Council of Ireland, William Martin said: “The Coach Tourism and Transport Council of Ireland is today calling on the Government to extend eligibility for claiming VAT71 relief to electric and alternatively fuelled buses. As an industry, we are committed to adopting sustainable practices and to improving the environmental credentials of our fleets – however the cost burden associated with purchasing these vehicles, coupled with the existing price gap between alternatively-fuelled buses and conventional diesel buses, has indefinitely delayed the transition for many operators.
Collectively, the transport sector has less than seven years to meet our legally binding target of a 50% reduction in carbon emissions. We need to see theprompt implementation of measures, schemes and policies which support the achievement of this objective. The CTTC acknowledges the tangible,substantive progress made through the introduction of purchasing incentives, such as the AFHDV Purchase Scheme. Building upon this momentum, we are today urging Minister for Finance, Michael McGrath to amend the existing VAT71 Ministerial Order, and extend eligibility to electric and alternatively fuelled buses”.