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EU wants Ireland to increase tolls on motorways


M50 and Port Tunnel users may have to pay up to 60 cent more after the European Court of Justice said the State must impose VAT on tolls levied on State-owned motorways.

The imposition of a 23 per cent VAT rate on M50 toll rates would see the toll for a driver with a tag account increase from €2.10 to €2.50, while those with a video account would see their €2.60 charge rise to €3.20 per journey.

The opinion issued by the European Court of Justice’s advocate general is the latest confrontation in a long-running dispute between the Revenue Commissioners, which believes VAT should apply to tolls on State-owned motorways and Transport Infrastructure Ireland (TII) and the Department of Transport, who believe it should’t.

The origins of the disagreement stem from May 2010 when the Revenue directed TII’s predecessor, the National Roads Authority, to impose VAT on State-owned motorway tolls.

This decision was immediately appealed by the Department and the NRA.

The matter was considered by the Revenue Appeals Commissioner who then forwarded it to the European Court of Justice.

While the matter was under consideration the TII/NRA has been paying roughly €17 million a year, around €70 million to date, by absorbing VAT into existing tolls.

No additional exchequer funds were provided to the TII/NRA to cover the cost of paying the VAT which meant the cash used was taken from the roads budget.

Verona Murphy from the Irish Road Haulage Association says any increase in toll rates would be unjust.

She said:

“The recovery is not such that we can sustain what we have suffered in the recession, never mind anything that might levy us with increases in what we do.
“Every time there is an increase in something to do with transport, the consumer ultimately is the one who suffers.