The increase in the tax burden on taxpayers will be felt again in 2024, particularly in the automotive sector where the Unique Circulation Tax (IUC) will increase for all categories at the predicted inflation rate, with the government expecting a revenue growth of €98.2 million from this tax next year.
It is certain that the most controversial measure of the IUC increase is the additional increase for vehicles prior to 2007, with the government justifying that it is a “complementary measure to strengthen the renewal of national fleets”. What the government claims to intend is an environmental reform of the IUC, by introducing the environmental component (CO2 emissions) also for these vehicles, as is the case for cars registered after 2007.
In other words, the “environmental reform” means that the calculation of the IUC value for cars up to 2007 will no longer be based solely on engine capacity, but will also take into account the environmental component, CO2 emissions, as is already the case for vehicles registered after July 2007.
It is certain that this decision will greatly increase the IUC for older cars, and the government has decided to mitigate this increase by limiting the tax increase in 2024 to €25, gradually increasing it “until the IUC rate represents the total taxation related to the CO2 (carbon dioxide) emitted by these vehicles”.
So, following the example of recent years, the State Budget for 2024 will “grow”, just like in the past seven years, considering the strong revenue from the IUC. According to the calculations of the Tax Authority, between 2015 and 2022, the revenue from the Unique Circulation Tax increased from €539.5 million to €772.6 million, which means that the state collected an additional €233.1 million from this single tax applied to the automotive sector.
The data for 2023 is not yet finalized, but considering the revenue growth until August, it is highly likely that there will be a significant increase compared to 2022.
It is also worth noting that, in addition to the IUC, the Vehicle Tax (ISV) will see an increase of about 5% in 2024, which is expected to result in a revenue growth of €24.5 million compared to 2023, according to the proposal for OE2024.
