New truck tyre levy in Republic €10.50 + VAT each
Truck and Bus operators will have to pay a new levy of €10.50 + VAT per tyre, to have have their waste tyres processed in an environmentally friendly manner, under new regulations that are coming into force in the coming weeks.
The new Producer Responsibility Initiative (PRI) for tyres has taken a major step closer towards becoming a reality. Tyre industry representatives were told on Tuesday that Minister Naughten wants the new Tyre Regulations to apply from July 1 2017. This date was seen as completely unreasonable and unworkable by the industry representatives present, who suggested a more realistic start date would be October 1 2017. This will ultimately be decided by the Minister.
It has emerged that the regulations will insist that the Visible Environmental Management Charge (vEMC) must be shown on all invoices, credit notes and delivery dockets issued by Producers to Retailers, and Retailers to Consumers, in a similar way that VAT appears on invoices.
The rate to be charged for a car: are as we have reported from day one of this saga is €2:80 + VAT at 23 per cent (as we also correctly forecast that the Revenue would require).
Regardless of the propaganda (and that includes statements from the Department of Communications, Climate Action & Environment) that exclude VAT when quoting prices (so €3.44 each is correct), the hundreds of thousands of ordinary motorists will see this as a new tax, that costs them €13.78 extra for four car tyres.
A carrot has been extended in relation to the car rate, in that if 90 per cent compliance is achieved, it may reduce to €2.30+ VAT at 23 per cent. That would still be €11.32 of a levy for four car tyres.
The rate for a motorcycle tyre is €1.85 including VAT at 23 per cent.
The levy for commercial tyres will be: light truck, (that’s up to 20 inches) somewhere between €6.70 to €7.00 plus VAT at 23 per cent.
Heavy truck tyres will be levied at between €10.50 – €11 plus VAT 23 per cent.
The Minister will decide on these two final figures. Minister Naughton is probably waiting to see the reaction from the Irish Road Haulage Association (IRHA), which had endorsed the Irish Tyre Industry Association’s (ITIA) position in calling on Minister Naughten to allow an Industry led, fit for purpose, compliance scheme, with the expressed objective of controlling the cost of recycling tyre waste. To say the least, I would suspect that the haulage sector, which is already under pressure will not be impressed with these additional major costs.
Repak declared at the meeting that it would consult with truck retread suppliers to work out an agreeable method for crediting casings collected for retreading, so that a vEMC was not collected twice on these tyres.
The strong agricultural lobby got a derogation of 6 to 12 months for the application of a vEMC for agricultural, industrial and construction tyres. Retailers should continue to include their current disposal charge when selling tyres in this category, as the retailer will still have to pay a registered collector to collect and recycle these tyres. The retailer will also have reporting obligations to Repak ELT for these tyres.
All importers must register with and report to PR Ltd who will operate an ‘independent blackbox’. The name and address of each customer must be supplied to them. Similarly, the category of tyres sold to each customer by quantity must be reported. However, the reporting the source of tyres placed on market will not be required.
Online reporting will be required monthly (15th of each month) with a paper record only accepted if the retailer has no broadband available in their area.
All retailers will have to register with and report to Repak ELT Ltd.
Retailers will have to report sales by category, car, van & 4×4 in a single category, with truck divided into two categories, light and heavy. Motorcycle tyres will be reported in a single category. Retailers will also have to report agricultural, industrial, and construction tyre sales with categories to be decided. However, it already seems unworkable with 25 categories listed in the draft regulations for a sector that only accounts for about 10 per cent of tyres sold.
The process will include naming the source of tyres (i.e. registered producer they are bought from). And then the name and registration number of who collects the waste tyres. And of course the quantity of tyres collected including agricultural, industrial, and construction units.
Retailers cannot purchase tyres from an unregistered producer. If they do, they will become the producer and will be liable for all vEMC payment collection and remittance for those tyres to the compliance scheme (Repak ELT) with additional reporting responsibilities as a producer to PR Ltd.
Another sticking point is that all retailers must declare their opening stock so that Repak knows how many tyres they have, on which they will collect a vEMC in the future.
They will also have to report sales of existing stock and remit the vEMC to Repak directly.
Repak wanted to invoice all stock on hand at retailer outlets and put a 3 month payment plan in place! Representatives from both the ITIA and the ITWRA that attended the meeting stated that this would be completely unacceptable to the tyre industry.
In addition, all waste tyres at a retailer’s premises at the start of the scheme will be charged at the rates above. It would be therefore logical that retailers should have the very minimal number of waste tyres at their premises in the lead up to the introduction of the scheme.
Finally for now, all tyre sales websites operating in Ireland will be obliged to have their compliance scheme registration number displayed at the point of sale.