Giorgia Meloni scraps road tax for millions of Italians

Giorgia Meloni will scrap road tax for millions of Italian drivers as the government seeks ways to boost support ahead of a national election in 2027.

The decision to abolish road tax for 14.5 million cars and motorcycles from next year is expected to cost the country's strained state coffers more than €2.3billion (£1.98billion). 

The policy was announced as her conservative coalition, made up of her Brothers of Italy party and two other parties, prepares to fight a general election that must be called by next autumn. 

The conservative coalition is trailing the centre-Left in the polls, and faces pressure from National Future, a new hard-Right ​party founded a few months ago by former general Roberto Vannacci which is steadily gaining ground. 

'We are abolishing one of the taxes Italians dislike most and continuing on the path of reducing the tax burden,' Meloni said.

The scrapping of the road tax will support Italian families 'who use cars and motorcycles every day - whether for work, taking their children to school, or getting around'.

The benefit will apply to all motorcycles and more than 70 per cent ⁠of small- and medium-sized cars, but citizens will be entitled to use it for just one properly insured vehicle. 

'We chose to continue our ​tax-cutting agenda, in line with the approach the centre-Right has pursued on previous occasions,' Meloni told a news conference after a ​cabinet meeting that approved the plan.

Giorgia Meloni will scrap road tax for millions of Italian drivers as the government seeks ways to boost support ahead of a national election in 2027

Under a draft decree seen by Reuters, the exemption would apply only in 2027 to vehicles with a maximum power output of 80 kilowatts (kW), at an estimated cost of €2.36 billion.

Economy Minister Giancarlo Giorgetti said Rome would try to make the measure permanent, meaning it ​was structured as a one-off for the moment.

An official added the government could intervene to put it on a more permanent ​footing through next year's budget to be unveiled in October.

Neither Meloni nor Giorgetti clarified where the money needed to cover the initiative would ‌be ⁠found.

Under its most recent budget plan, due to be updated in the next few weeks, Italy sees its public debt peaking at almost 139 per cent of gross domestic product (GDP) this year, replacing Greece as the euro zone's most indebted country.

Following the announcement of the policy, opposition parties accused Meloni of electioneering, amid speculation that a vote could be called as early as April.

'In the 80-year history of the Republic, electoral demagoguery has never reached such a reckless level of poor governance as that seen in the prime minister’s announcement regarding the abolition of the tax for the majority of economy cars in our country,' said Eugenio Giani, a member of the centre-Left Democratic Party and the governor of Tuscany. 

He added that there would be huge holes in the budgets of Italy’s 20 regions as a result of doing away with the tax. 

Tuscany alone would miss out on €350m in revenue, he said. 

Following the announcement of the policy, opposition parties accused Meloni of electioneering, amid speculation that a vote could be called as early as April

Others dismissed the initiative as a bid to divert attention from rising electricity, gas and fuel costs. 

'It’s like treating pneumonia with a throat lozenge,' said Rossano Sasso, a ​senior aide to Vannacci.

Meloni dismissed accusations that the move was an attempt to win voters’ support. 

The prime minister also denied that the government was considering calling the election early, insisting that she wants to see out her full five-year term, which ends next September. 

This month she became Italy's longest-serving prime minister since ​World War Two, beating a record set by the late Silvio Berlusconi.

'I would like to stay in office until the end of the legislature. I’ve taken some pride in the stability of this government,' Italy’s first female premier told a press conference.

She has ruled out an alliance with Vannacci’s increasingly popular National Future party, despite it surging to nearly 8 per cent of the vote.

Meanwhile, the centre-Left alliance that Meloni will face at the election has problems of its own. 

It is bitterly divided over the war in Ukraine, with one party leader saying that by continuing to send weapons and money to Kyiv, the West risks instigating 'the Third World War'.

The unsteady alliance of several parties has not even been able to decide who will lead it into the election.