In February this year ACAP (the Portuguese Automobile Association) estimated there are around 1.5 MILLION cars on the nation's roads that are over 20 years old... this would see the government raking in enormous sums of cash if IUC contributions are increased exponentially next year

Almost 400,000 sign petition against government’s plan to hammer old cars with massive tax rise

Portugal’s government wants to make owners of old cars ‘compensate’ for reduction in motorway toll revenue

Almost 400,000 citizens, have signed a petition against by the government’s plan to make the owners of old cars (cars pre-dating 2007) essentially compensate for looming reductionos in the cost of motorway tolls.

The reasons are set out point-by-point in the petition, addressed to President of the Republic Marcelo Rebelo de Sousa, and prime minister António Costa.

The petition runs, ‘Your excellencies’

A) The difficulties faced by citizens living in Portugal due to the successive increases in prices, many of which are more inflated than in other eurozone countries, are common knowledge.

B) We have been informed through the media that measures are being considered to increase the Single Road Tax (IUC) for vehicles registered before July 2007, as a way of compensating for the losses resulting from the discounts that the government plans to apply on the motorways (the old SCUTS) A23, A24, A25 and A22 in the Algarve, with the possible extension to the A13. 

We would remind you that these old SCUTS should be free of charge, since they were partly financed with European Union funds and free of charge was their original purpose.

C) As you know, this year has seen the biggest increase in IUC in recent years, affecting both two-wheeled vehicles and cars manufactured before and after July 2007.

D) We would like to point out that the majority of owners of vehicles registered before July 2007 belong to more economically vulnerable social groups, since if they had more favourable financial conditions they would be able to change their vehicle regularly.

E) The purpose of this petition is to present an alternative suggestion, which we believe to be fairer and more coherent. Electric vehicles are currently exempt from paying IUC as part of an effort to promote the energy transition. We recognise the importance of this transition, but we believe that it should not be used as a pretext for all tax measures.

F) For the most part, those who buy electric vehicles are companies and individuals with greater financial capacity. In this sense, we don’t agree with the IUC exemption for electric vehicles. It is inconceivable that a vehicle that is more than two decades old, such as a car manufactured in 1995, which no longer has significant commercial value, should be forced to pay IUC or face a significant increase to compensate for the discounts on ex-SCUTs, while vehicles that cost more than 100,000 euros and have a power output of 1020cv are exempt from this tax, such as a Tesla Model s Plaid. It’s important to note that a vehicle with 1020cv is classified as a supercar, and there are many other electric vehicles with 400cv and 500cv that are also exempt from IUC in Portugal.

G) We propose that electric vehicles start paying IUC according to the power of their engines, eliminating the current exemption, and that they not be subject to the additional carbon tax that is applied to combustion vehicles. 

We believe this is the fairest and most equitable measure, which will not disadvantage those who face significant financial difficulties and who don’t even use those same motorways. Often, these people are not looking for subsidies, they simply wish not to be further burdened by disproportionate tax charges.

H) We thank you for your attention to this matter, confident that your consideration will result in fairer and more equitable tax policies for all of Portugal’s citizens.

Yours faithfully

The petition can be found on the public petitions site. At the point of writing this text, signatories numbered almost 51,000. Within two weeks the number had increased to over 391,000, and the government was being pressured to think again.

Meantime, critics of the government’s proposed State Budget for 2024 have remarked how the much-touted reductions publicised for income tax belie the ‘extra taxes’ creeping in in the small print. This IUC proposal is one of them.