The Irish Environment Minister has unveiled a scheme that will allow new car owners to calculate how much they will pay in Vehicle Registration Tax and motor tax.

The new labelling system, launched by Minister John Gormley, hopes to encourage drivers to purchase cars with lower carbon emissions.

This moves follows the government's decision in the last Budget to tax cars, in the Republic, based on their emissions rather than engine size.

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Seven levels of emission have been created in the new system; these will determine how much tax new car buyers will pay, from the start of next month.

The first level, which is a low rating, will cost around €100 to tax.

However, those cars falling into category seven will pack a hard punch on drivers' pockets, with an annual tax tariff of around €2,000.

The car industry has seen a downturn in sales during recent months; many within the market have attributed the decline to uncertainty over the revision of motor taxation.

But the government has said many trading within the motor industry have back the new scheme.

(PR/JM)