With the 2017 State Budget, the Government proposes cuts and increases in incentives, an increase in the Vehicle Tax (ISV), changes in the Single Circulation Tax (IUC) and changes in fuels. Before opening the “purse strings”, clarify all your doubts here so that you are not surprised.
“We are, of course, going to witness an aging of the car fleet because we are facilitating the entry of scrap into the country”.
Jorge Neves da Silva, Secretary General of ANECRA
1 - ISV goes up 3% in vehicles registered in 2017
It is the highest tax rate for cars in the 2017 OE, with a 3% rise in the environmental component and in the displacement.2 – IUC increases by 0.8% and the extra rate for Diesel is maintained
The IUC rises 0.8%, after having already risen 0.5% in 2016. However, the accounts do not stop there: there is a aggravation rate for the most polluting vehicles it can reach 8.8%. Already in Diesel to surcharge , introduced in 2014 by the previous government, is to be maintained: the value can reach 68.85 euros.
3 – Import of cars older than 5 years is benefited
When a car is imported, you pay ISV, however, there is a discount that is applied depending on the age of the car. The maximum limit for this discount is 52% for cars aged 5 years or more. With OE 2017 the Government proposes the introduction of new ranks , beyond 5 years of enrollment, reaching up to 80% for vehicles over 10 years old.This is one of the measures that has caused the most reactions and is a “repeater” in the current Government's State Budget proposals. In 2015, the same change was made to the State Budget proposal for 2016 and the reactions were not long in coming, with a large part accusing the Executive of promoting the entry of polluting and less safe vehicles in Portugal.
The harshest words are from the secretary general of the National Association of Automobile Commerce and Repair Companies (ANECRA), Jorge Neves da Silva: “We are, of course, going to witness an aging of the car fleet because we are facilitating the entry of scrap into the country”. Speaking to Agência Lusa, the official at ANECRA also highlighted the fact that the aging of the national car fleet is getting worse, year after year: “7 years ago the park's average age was 7.9 years, now it's 12”.
4 – 100% electric lose all benefits. Plug-in hybrids keep, but only half.
For OE 2017, the government proposes a halving of the incentive to purchase plug-in hybrid vehicles. This incentive is granted through a tax benefit, which will reduce the amount payable to ISV by €562 (maximum value) for vehicles registered in 2017 that have this feature. With OE 2017, 100% electric vehicles lose the benefit they had as a discount on the ISV.
5 – Fuels: taxes go up for diesel, gasoline goes down
The Government justifies this measure with the introduction of the professional diesel , whose acquisition is limited to the transport of heavy goods (35 tonnes or more) and was created to avoid supplying transport companies in Spain.
This professional diesel allows a deduction of 13 cents per liter for the part that concerns the petroleum tax. However, all other Diesel vehicles are left out, including public transport.
With this measure, the Government intends to reverse the scenario that was created over the years in the national car park, where through the tax burden, the purchase of Diesel vehicles was encouraged, which is currently the most consumed fuel in the country. It is still unknown how much the liter of gasoline will drop, today the difference for a liter of diesel is over 20 cents.
But after all, will the price of diesel go up? In the text of OE 2017, the Government guarantees that the impact of this fiscal change will be "neutral" for consumers, without changing the final value, that is, the Government promises that consumers will not experience price changes . On the other hand, it can be read in the document that this fiscal change will make the price of gasoline go down.
You can consult the 2017 OE here.
Sources: Jornal de Negócios / Observer / Eco