Italy plans to abolish the annual road tax for 14.5 million cars and motorcycles from 2027, with the measure expected to cost EUR 2.36 billion and add to existing fiscal pressures.
The Italian government announced it would scrap the annual road tax for 14.5 million cars and motorcycles beginning in 2027. The measure will drain more than EUR 2 billion from state finances at a time when Italy already faces significant budget pressures.
Prime Minister Giorgia Meloni’s government approved the tax elimination as part of what officials described as a continuation of their tax-cutting approach. The exemption applies to all motorcycles and more than 70% of small and medium-sized cars, though each citizen can only claim the benefit for one properly insured vehicle.
The draft decree limits the exemption to vehicles with a maximum power output of 80 kilowatts, with an estimated cost of EUR 2.36 billion for 2027. The government indicated it plans to make the measure permanent through next year’s budget review in October.
The road tax decision fits within a larger spending pattern. The government has already spent approximately EUR 2.8 billion on various fuel relief measures, including temporary excise duty cuts for truck drivers.
On the same day as the road tax announcement, Italy renewed an excise duty cut on diesel until 25 September 2026. The cut was reduced to EUR 12.2 cents per litre from 17 cents, then will drop further to around 6 cents between 26 September and 5 October.
Both the European Commission and the International Monetary Fund have argued that Italy should use more targeted relief aimed at vulnerable households and businesses rather than broad spending that impacts the overall budget.
