UPDATE: Portuguese government scraps proposed controversial IUC vehicle circulation tax rise

Image of cars in Portugal.

Image of cars in Portugal. Credit: meowKa/Shutterstock.com

Wednesday, November 15 at 3:22 pm

IN a shock U-turn, the Portuguese government has axed its proposed increase in the Single Circulation Tax (IUC).

The ruling Socialist Party (PS) circulated a statement to news agencies at around 11:30 pm on Tuesday evening, explaining the reason for this amendment to the original proposal.

‘The light vehicle is in many cases still the main form of travel to work or to the nearest means of public transport, mainly outside the country’s main cities and in medium and low density areas, where the supply of public transport is reduced and unsuitable for daily mobility needs’, it read, according to sicnoticias.pt.

This change of policy came after Fernando Medina, the Minister of Finance, responded to a question in parliament yesterday from Chega deputy André Ventura on the matter.

After being asked if the PS would consider changing the proposal, he said: ‘We are now in the specialty phase and proposals from the various political groups are arriving. Naturally, the PS parliamentary group will carry out this assessment of all the proposals that came in and of its own proposals’.

How many people signed the petition against the proposal?

A public petition launched shortly after the Government’s initial announcement about the proposed increase IUC was said to have already surpassed the 400,000 mark. It is believed to be the most-signed ever in Portuguese history.

Carlos Barbosa, the president of the Portuguese Automobile Club (ACP) told Lusa: ‘As expected, with elections scheduled, (PS) got scared and took a step back, although I think they would have with the public outrage, but now with elections at their door, they got scared’.

Referring to reports of Medina ‘joking’ that the increase was ‘only €25’, he insisted: ‘It’s an insult to the Portuguese people. They knew they would be punished in the election so they backtracked’.


Saturday, November 11 at 3:59 pm

SALES of old cars to dealers are reportedly on the increase in Portugal.

Since the government announced it was increasing the Single Circulation Tax (IUC) in 2024, more than 400,000 motorists have already signed a petition against the measure that was published in the 2024 State Budget, according to cmjornal.pt, citing Jornal de Notícias.

A maximum of €25 per year will be placed on cars and motorcycles registered before July 2007, and the tax will be progressive. The amount of carbon dioxide (CO2) emitted by vehicles into the environment is instrumental in paying this tax.

As confirmed by the Portuguese Automobile Trade Association (APCA), more customers are turning up at dealers trying to sell their cars in order to. ‘reduce the impact of what could happen’ with the progressive increase in tax.

Nuno Silva, the APCA president, disagrees with the new OE2024 measure and suggested more incentives. ‘If people have older cars, it’s because they can’t afford to buy more modern vehicles. There has to be an incentive, it’s not enough to increase the tax’, he explained to the news outlet.

Second-hand car dealers will experience many difficulties in selling older cars, and will end up closing, suggested Silva. ‘When people start selling their vehicles it’s because they don’t want to pay more expensive IUC. But others won’t buy these vehicles either, which will cause the cars to continue to depreciate in value’, he continued.

A ‘provisional suspension’ of the tax for at least one year, with the aim of easing the establishments’ bills, was a good idea said the APCA.

Thank you for taking the time to read this article. Do remember to come back and check The Euro Weekly News website for all your up-to-date local and international news stories and remember, you can also follow us on Facebook and Instagram.

Written by

Chris King

Originally from Wales, Chris spent years on the Costa del Sol before moving to the Algarve where he is a web reporter for The Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at editorial@euroweeklynews.com