Italy to suspend car tax in 2027 for vehicles under 80 kW

The Italian government has approved a decree-law to suspend the car and motorcycle tax (bollo auto) for the year 2027. The measure targets individuals owning a single vehicle with a maximum power of 80 kW, affecting approximately 14.5 million vehicles, or 70% of the national fleet.

To fund this initiative, which is estimated to cost approximately 2.3 to 2.4 billion euros, the government intends to utilize liquidity management from the Recovery and Resilience Facility (PNRR) funds. European Commissioner for Economy Valdis Dombrovskis confirmed that member states have “a certain margin” in managing these funds, noting that the instrument is performance-based rather than cost-based.

The decision has sparked significant political debate. While supporters view it as a way to provide relief to families amidst high energy costs, critics and opposition parties, such as the Movimento 5 Stelle, have questioned the priorities of the spending. Concerns have been raised regarding the impact on regional budgets, particularly for healthcare and transport, and whether the funds should instead be directed toward school safety and infrastructure.