The opposition to the increase in IUC for vehicles registered until 2007 continues to intensify, and in addition to the public petition to end the measure included in the 2024 State Budget proposal, which has already gathered over 365 thousand signatures, now it was the turn of the National Association of Portuguese Municipalities (ANMP) to criticize the changes proposed by the Government, arguing that these alterations cost the municipalities €40 million.
In a statement, the ANMP speaks of “unacceptable” measures and says it cannot accept “the appropriation by the State of 30% of the engine capacity component of category A vehicles, nor the freezing of revenue for municipalities in categories A and E”.
In its opinion on the proposal for the 2024 State Budget Law (PLOE2024), sent to the Assembly of the Republic, the ANMP highlighted that in the Single Vehicle Tax (IUC) for category A vehicles, whose revenue is currently 100% municipal, it will lose around €40 million, considering the 2022 values, since the OE2024 proposal establishes that 30% of this revenue will belong to the State.
“To aggravate, and due to substantial increases in IUC, an annual variation ceiling of €25 per vehicle is created, establishing from the outset that when this ceiling is applied, municipalities are only entitled to receive the equivalent of what they received in 2023, thus ‘freezing’ municipal revenue,” the ANMP also highlights.
Therefore, the controversial increase in IUC for vehicles registered until 2007, which in 2024 has a maximum limit of €25 per vehicle, will not be reflected in the accounts of municipalities since the funds will go entirely to the State’s coffers.
“These are two measures that the ANMP considers unacceptable, as it cannot accept the appropriation by the State of 30% of the engine capacity component of category A vehicles, nor the freezing of revenue for municipalities in categories A and E,” emphasized by the ANMP.
In its opinion, the ANMP also highlights that the change in the framework of IUC, both in terms of revenue ownership and the applied brackets and rates, will result in “a substantial increase in revenue” from this tax.
It should be noted that the IUC, which has increased by €233.1 million in the last seven years, is currently shared among municipalities, autonomous regions, and the State, with municipalities receiving 100% of the revenue for vehicles in categories A, E, F, and G, as well as 70% of the engine capacity component for category B.
The remaining 30% of the engine capacity taxes for category B go to the State and the autonomous regions. The State and autonomous regions also receive 100% of the CO2 component in this category (B), which is the only one taxed based on CO2.
