A large number from the tyre industry attended a meeting in Portlaoise on Tuesday Night, September 4. There were representatives from all corners of the country – from Donegal, Cavan, Monaghan, and Louth, down to Kerry, Cork, Waterford and Wexford and from Dublin to Galway.
The officers of the Irish Tyre Industry Association (ITIA) and Independent Tyre Wholesalers and Retailers Association (ITWRA) outlined their concerns to all those in attendance with regard to the new environment levy due to be applied by Minister Denis Naughten TD on the purchase of new tyres in this country from October 1st. A legal representative and specialist in European Competitive Law also briefed the meeting, and there were many contributions and questions from the floor.
One major grievance was the very poor and often non existent communication from Repak ELT and their failure to reply/answer questions from members of the tyre industry. One attendee said that his information comes from the Tyre Trade Journal and the tyre industry associations but nothing from Repak ELT or the Department of Communications, Climate Action and Environment.
Several members referred to information evenings that Repak held at a small number of locations, but the wider tyre industry was not informed about them and indeed some present claimed they had been refused admission to them.
As a consequence, these meetings were very poorly attended by the tyre trade and this is reflected on their website in the breakdown of those that have signed up to the proposed scheme. Very few from the tyre industry have signed up at this stage.
Another member said no workshops were held north of a line from Dublin to Galway, which he said appears to show a total unwillingness to talk to those that will be worst affected because of an expected huge growth in travel to Northern Ireland for the purchase of new tyres, where no levy exists.
In addition, it is expected that the black market in new tyres and tyre waste will blossom, particularly in this region with consequent massive losses of tax revenue to the Irish State and an increases in unemployment due to the financial impact on the legitimate tyre and indeed wider auto trade.
Minister Naughten and his Department have certainly not adequately addressed the issue of Northern Ireland and resulting distortion of trade issues arising from this proposed tyre levy. The Minister has certainly not given due regard to this and as sure as day follows night, it certainly will have consequences as outlined above.
We now have the farcical situation where Minister Naughten is going sign new regulations that will apply in less than 24 working days, without any formal notice of the finished regulations having been given to the trade, who are expected to operate them, and businesses and the motoring public, who will have to pay for it.
Another major problem arises with the need too make major changes to IT systems in businesses. One importer/wholesaler told me that requests for a technical implementation plan, which would be standard in any first world economy implementing such a major change have been totally ignored. I suppose if the Minister, his Department and their selected operator fail to inform those that will be required to implement the regulations (as was very evident from speakers at the meeting in Portlaoise) cannot answer basic questions that arise from the tyre industry, what chance of them acting professionally and producing a detailed technical implementation plan?
In addition, the Minister, his Department of Communications, Climate Action and Environment and the service delivery provider that they appointed (Repak ELT), are all failing to meet their obligation to inform and educate the tyre trade and wider auto trade, as well as the motorists, business, including hauliers, etc. who will ultimately pay this tax at a rate of €3.44c per car tyre and €11 plus VAT per truck tyres. If it wasn’t such a serious matter, what is going on would put the British tv comedy ‘Yes Minister’ in the halfpenny place.
There was total agreement at the meeting that the initially high enforcement levels promised to the tyre working group will not now happen. The Minister has reneged on a promise to introduce fixed penalty notices as part of a proper enforcement campaign. The tyre industry feels it was mislead and the Minister is not willing to risk having this added to a bad law and put it in front of the Houses of the Oireachtas for approval.
Minister Naughten appears to have at best displayed a lack of understanding of the consequences of these regulations without proper enforcement. Indeed, his actions will definitely equate to interfering in the tyre industry by restraining the trade in tyres in the Republic as a result of introducing a high tyre levy, which will drive trade to Northern Ireland, where no such levy exists.
In addition, these new regulations will also mean that retail tyre prices will rise here due to lower levels of competition, because of restrictions due to price disadvantages for legitimate operators in the Republic and the lower volume of sales here due to buyers going north.
One tyre retailer from the border region told me that Minister Naughten should remember and care about the oath he took upon taking office to always act for the public good. He should act in the interest of Irish citizens and not rush through bad laws with no real-life enforcement plan, which will encumber hard working legitimate businesses in this country. As if they haven’t enough surviving to deal with Brexit and a falling Sterling v the Euro, this interference by our own Government may be a step too far for many.
Tyre sales will be driven to rogue operators who pay no taxes and jobs will be lost in the legitimate, tax compliant businesses, particularly in the northern half of the Republic -north of the Dublin to Galway line, where access to Northern Ireland is much easier.
It has also emerged that tyre wholesalers cannot register and get the required information to try to prepare their IT systems and invoices/statements etc, sorted. A very expensive and not budgeted for investment, which will be impossible to have in place in such a timescale for October 1st.
And news breaking – we have learned that one of the largest tyre manufacturers supplying the Irish market will not now be registering for this scheme. We have also learned that it is also highly likely that other major tyre manufacturers may follow suit and declare this month that they too will not register as producers. And there is nothing that the Government can do about this or any other supplier outside the State who wishes to do similarly. This will have the effect of increasing the number of ‘Producers’ exponentially and will leave these new ‘Producers’ struggling to comply with complex reporting requirements to both PR Limited and Repak ELT Ltd. The realisation that this is an over-priced, bad law that is destined to fall-apart is sure to have made up their minds.
I have being saying it now for a long time – these proposed regulations are bad and now without the promised rigorous enforcement they will fail even sooner that I have previously forecast. The worst part of this sad saga is that politicians, civil servants, and quango employees, do not really understand or care about some of the basic requirements of running a successful small to medium size legitimate businesses.
Yet, they will combine to interfere and damage such hard-working people who ultimately pay their salaries, while having only given lip-service to the tyre industry in the formation and implementation (still unknown) of these new regulations and high levies.
The Tyre Trade Journal has forecast correctly where we are up to now, and I take no pleasure in this, but mark my words it is doomed to fail, and at a great cost to Irish taxpayers. And no one will expect any of the authors of these unfit for purpose regulations to be sanctioned or sacked for the untold waste and damage that will be done before it falls apart.