Italy has announced the removal of the car tax for 14.5 million cars and motorcycles, according to Prime Minister Giorgia Meloni on Wednesday. This decision is expected to burden the already strained state budget with costs exceeding €2 billion.
The initiative comes as the government seeks to boost its popularity ahead of next year’s legislative elections.
Meloni’s conservative coalition is trailing behind the center-left opposition in polls and faces growing pressure from the extreme-right party, Futuro Nazionale (National Future), led by Roberto Vannacci, which is steadily gaining support, as reported by Agerpres, quoting Reuters and ANSA.
“Today, the government is eliminating one of the most despised taxes by Italians,” emphasized Prime Minister Giorgia Meloni in a statement from her office, referring to the so-called “bollo auto.”
The new policy will benefit all motorcycles and over 70% of small and medium-sized cars with a power output of up to 80 kW, allowing citizens to apply for this measure for a single vehicle, as specified in the official announcement.
The Most Indebted Nation in the Eurozone
By 2027, this tax exemption is projected to cost the state €2.36 billion, according to a draft consulted by Reuters, which raises questions about how Meloni will finance this initiative.
In the most recent budget plan, to be updated in the coming weeks, Italy expects its public debt to peak at nearly 139% of its Gross Domestic Product (GDP) this year, surpassing Greece and becoming the most indebted country in the Eurozone.
Coalition parties have welcomed the measure as part of the government’s agenda to reduce taxes, while critics have dismissed it as a distraction from rising fuel prices.
“It is like treating pneumonia with a throat lozenge,” stated Rossano Sasso, a close advisor to Vannacci.
Fuel prices in Italy have been rising for several months due to the conflict between the US and Iran disrupting global supply, forcing the government to spend €2.8 billion so far to finance tax reductions on fuel.
