Which vehicles qualify for the tax exemption?
The exemption covers motorcycles and cars powered by petrol or diesel, including hybrids, with power not exceeding 80 kW. Owners of one or more qualifying vehicles are freed from the annual fee. The rule applies regardless of whether the vehicle uses a single power source or combines propulsion systems. The decision targets two-wheelers and passenger cars of small and medium engine size as stated in the cabinet announcement. The law explicitly states that vehicles fuelled even in combination with another propulsion source such as hybrids remain eligible provided total power stays within the limit. This scope was chosen to focus relief on everyday transport options rather than high-performance models. The cabinet announcement made clear that the exemption applies to both two-wheelers and passenger cars fitting the small and medium categories without further subdivision by exact engine displacement beyond the 80 kW threshold.
When does the abolition take effect?
The new rules enter into force on 1 January 2027. The government approved the change during a cabinet meeting in September 2026. Officials stated that the measure will apply permanently rather than as a temporary relief. The goal is for the abolition to have permanent character beyond the immediate economic conditions. Government statements emphasised that the reform is intended to remain in place for future years and not to be reversed once the current economic pressures ease. The timing of the 2027 start was selected to give administrations and taxpayers adequate preparation while ensuring the policy is embedded before the next electoral cycle.
How many vehicles and taxpayers are affected?
Approximately 14.5 million vehicles fall under the exemption criteria. This total includes both two-wheelers and passenger cars of small and medium engine size. The change removes one of the taxes Italians have long disliked most intensely, according to statements from the prime minister. The figure represents a substantial share of the national fleet and underscores the breadth of the relief. By targeting this segment the government aims to ease costs for the majority of ordinary vehicle owners who rely on smaller and medium capacity engines for daily mobility. The prime minister highlighted that this particular tax ranked among those most resented by citizens, making its removal a notable fiscal adjustment.
Why do regional governments object to the reform?
Regional presidents argue that circulation tax revenue currently supports the budgets of Italy’s 20 regions. They describe the abolition as unprecedented electoral demagogy. One regional leader, Eugenio Giani of Tuscany, publicly criticised the timing and framing of the decision. Part of the regional presidents expressed strong opposition to the measure. The presidents recalled that fees paid by citizens have historically strengthened regional treasuries and that the sudden loss of this income stream creates immediate budgetary pressure. The criticism centres on the perception that the timing, coming ahead of elections, prioritises political gain over sustainable fiscal planning for sub-national governments.
How will regions recover lost revenue?
The central government in Rome will directly fund approximately 45 percent of the revenue shortfall caused by the tax abolition. This transfer aims to offset part of the financial impact on regional treasuries while the remaining gap remains unaddressed in the initial announcement. The fees previously collected by citizens went to strengthen the funds of the 20 regions. The direct funding commitment from the national level is presented as a partial compensatory mechanism that still leaves regions to manage the balance of the shortfall through other adjustments. Officials noted that this approach was adopted because the measure was judged to require permanent status even though it originated in a period of extraordinary economic circumstances.
Frequently asked questions
Does the exemption apply to electric vehicles?
The published criteria focus on petrol, diesel and hybrid vehicles up to 80 kW. Electric-only vehicles are not mentioned in the exemption text.
Will owners of multiple vehicles receive multiple exemptions?
Yes. The law states that owners of one or more qualifying vehicles are exempt from payment of the tax.
Is the measure temporary or permanent?
Government officials have repeatedly described the abolition as a permanent reform intended to remain in place beyond the current economic conditions.
Which regions lose the largest share of income?
The source does not break down revenue loss by individual region, only noting that the 20 regions collectively receive the fees today.
Will any other taxes replace the abolished fees?
No replacement tax is mentioned in the cabinet decision or accompanying statements.
