Italy announced its proposal to provide subsidies of up to 6,000 euros ($6,820) to green vehicle buyers while implementing a tax hike on larger vehicles that run on traditional fuels.
The measures included in the country’s budget proposal for 2019 was approved by the upper houses of parliament on Sunday. It made modifications to the proposed rules by Rome earlier in December which attracted criticism from the auto industry.
Sector associations and Unions warned that the proposed taxes could hurt both carmakers and auto-related jobs. The country’s two ruling parties, 5-Star Movement and League, were in conflict about the subject, with the latter questioning the taxation on traditional fuel vehicles.
In the approved new form, the proposed taxes would only apply to larger petrol and diesel cars, such as SUVs. Small family-owned vehicles are exempted from said rules.
Vehicles that run on traditional fuels that produce 161-175 gm of CO2 emissions per km will be fined with a tax of 1,100 euros.
Meanwhile, incentives for green and electric cars will vary depending on the volume of emissions generated. It will not apply to models worth greater than 50,000 euros, or US$57,000.
The proposed new measures which are expected to be passed this week in the lower house of parliament, will be effective March 2019 and last until the end of 2021.