Govt agrees €30m fuel, €30m motor tax subsidies

The government on Thursday agreed to allocate EUR 30 million in fuel subsidies to ease cost pressures on entrepreneurs in the road transport, agriculture and forestry sectors, said an official press release.

The details of how the fuel support will be targeted will be specified as the preparations continue.

Meanwhile, the government will triple the reduction in the basic tax on motor vehicles decided on in the spending limits session in spring 2026.

The motor vehicle tax will be reduced by a total of EUR 30 million, of which EUR 20 million has been agreed on now. This reduction will be allocated in the same way as the reduction carried out earlier in the government term.

The threshold for the deduction for commuting expenses in 2027 will be raised from the current EUR 7,000 to EUR 7,800. The amount of funding reserved for this is EUR 10 million.

The government will also introduce new flexibilities to the fuel distribution obligation. These will make it possible to meet the obligations in a more cost-effective manner and thereby ease pressure on fuel prices. The limits on both cross-fulfilment and over-compliance under the distribution obligation will be increased from the current 30 per cent to 100 per cent.

The EUR 60 million package decided on by the government under difficult financial circumstances will be financed within the central government spending limits. EUR 40 million in funding allocated this year for the construction of biogenic carbon capture capacity, which will not be used this year, will be reallocated to commuters who rely on a car and to entrepreneurs in the transport, agriculture and forestry sectors. EUR 20 million will be raised by reducing funding for basic transport infrastructure management.

The government is preparing a diesel tax refund scheme for heavy commercial transport, known as the professional diesel system. A government proposal on the matter will be submitted to Parliament this autumn.