Italy's Council of Ministers on Wednesday approved a decree-law to abolish the automobile tax, known as the bollo auto, for 2027 on low- and medium-power cars and all two-wheeled motorcycles. The decision has sparked fierce controversy between the jubilant majority and the opposition, which accuses the government of a propaganda stunt.
The measure will apply to vehicles up to 80 kW and, for now, only covers the year 2027. To compensate regions for lost revenue, the state plans to transfer 2.3 billion euros next year.
Each citizen will be entitled to one benefit only. According to the draft decree, individuals who meet the requirements "are exempt from paying the car tax for a single regularly insured vehicle." The exemption applies to "car tax payments whose ordinary due date falls between 1 January and 31 December 2027."
"If there are multiple eligible cars," the text states, "the exemption is granted for only one of them and applies to the car with the lowest power in kW. In the event of equal power, the exemption applies to the car for which, without the benefit, the lower car tax amount would be due."
The measure targets all motorcycles and over 70% of cars currently on the road: "In total, approximately 14.5 million vehicles."
The best-selling car models in the Italian market that offer versions under 80 kW include the Fiat Pandina, Dacia Sandero, Citroën C3, Toyota Yaris, Renault Clio, and crossovers such as the Jeep Avenger in its base petrol version (1.2 Turbo), which produces exactly 74 kW. Also included are the Volkswagen Polo, Seat Ibiza, Peugeot 208, Opel Corsa, Hyundai i20, and Lancia Ypsilon.
So far, no funding sources have been indicated. The draft specifies that "in relation to the financial effects resulting from non-payment of the car and motorcycle tax, with the aim of helping to adjust the budgets of the Regions and the Autonomous Provinces of Trento and Bolzano," a "total transfer of 2,293.5 million euros for 2027, as compensation for reduced revenue," is envisaged.
Currently, the Regions manage the tax and retain the revenue. According to estimates, a full abolition of the tax would actually be worth much more than 2.9 billion euros, specifically between 6.5 and 7 billion.
Prime Minister Giorgia Meloni clarified this point during a press conference: "The car tax is collected by the Regions; we are not adopting a measure that someone else has to pay for: we will transfer the lost revenue to the Regions."
The car tax is one of the oldest taxes in Italian history. It was introduced in 1953 as a "circulation tax" and accompanied the boom in motorization. In the 1980s, it became a "property tax."
"Today, the government cancels one of the most hated taxes by Italians," commented Prime Minister Giorgia Meloni. During the press conference following the Council of Ministers, she dwelt at length on the measure, linking it to high fuel prices and the decision to extend the excise duty cut.
"We chose to transform part of the resources used so far against expensive fuel into a simple and structural measure, designed especially for those who use their car and motorcycle daily to work, accompany children, and get around. A concrete choice: we cancel one of the most hated taxes by Italians and continue on the path of reducing the tax burden."
Meloni then explained the origin of the measure: "The scheme copies the one that another center-right government, of which I was part (the Berlusconi government), used for housing: abolishing the tax on the first car owned, up to a certain power, trying to focus on those who need it most."
Forza Italia had pushed hardest for a drastic measure on this tax. Deputy Prime Minister Antonio Tajani had recently revived the idea of a complete elimination of the car and motorcycle tax, a historic battle of the center-right.
"Today we abolish the car tax, an unjust and unbearable tax, starting with the cars and scooters that families use every day," Tajani wrote on X.
"It was a firm and pressing request from Forza Italia, which the executive accepted and adopted. A measure consistent with our liberal vision since the founding of the azzurri movement and Silvio Berlusconi's battles for 'lower taxes for all,' which led, among other things, to the abolition of IMU (property tax) on first homes. Car tax exemptions are just the beginning," he concluded.
"Promise kept: goodbye car and motorcycle tax in 2027. Taaac!" wrote Deputy Prime Minister and League leader Matteo Salvini on social media.
"It was a long-standing commitment and today in the Council of Ministers we decided: 13 million drivers and 7 million motorcyclists will not pay the tax in 2027, under 80 kW, for the first car and first motorcycle. Very good!" he added.
Maurizio Lupi, president of Noi Moderati, took a similar line.
A more cautious position was adopted by Enrico Costa, who spoke of a partial abolition.
Among those criticizing the decision is Luigi Marattin, secretary of the Liberal Democratic Party.
"Abolishing the car tax is right in our view, but abolishing it for a single year, as the government is doing, is not. For a very simple reason – he explained – next year we will have to find 2.4 billion just to avoid reintroducing it, and citizens will have already gotten used to not paying it. There is nothing worse than making efforts not to lower taxes, but to keep them from rising. Because of the 'let's think about it next year' mentality, this country has used the future as a garbage dump."
The opposition, however, criticizes the measure: "We are facing yet another deceptive propaganda operation by the government. While the price of petrol continues to rise – emphasizes Silvio Lai, a PD deputy on the Budget Committee – seriously straining families, workers, and businesses, the majority tries to sell as a great change the abolition of the car and motorcycle tax, which is not for everyone anyway. We are talking about a measure that, for many citizens, is worth at most one or two tankfuls of fuel."