Italy will waive vehicle tax for millions amid high fuel costs

The Italian government, led by Premier Giorgia Meloni, will suspend the vehicle tax for lighter passenger cars and all motorcycles and scooters in 2027.

This measure will apply to approximately 14.5 million vehicles in Italy. The government cites high fuel prices as the reason for the tax relief, aiming to lessen the financial burden on families. The suspension will automatically apply to the vehicle with the lowest engine power, cars with engines around 110 horsepower (80 kilowatts) will qualify.

Owners will only receive the benefit for one vehicle, excluding larger cars or additional vehicles. Meloni’s government, a coalition of right and far-right parties, intends to permanently abolish the vehicle tax after 2027, calling it “one of the most hated taxes” in the country. The government plans to provide 2.3 billion euros in subsidies to compensate the regions, which largely collect the vehicle tax, for the expected loss of revenue.

However, some regional leaders, like Eugenio Giani, the president of Tuscany, criticize the move as reckless and irresponsible, arguing that the subsidies will not adequately cover the financial shortfall. The vehicle tax currently generates more than 7 billion euros annually for the state.