EU Reduces Sales Tax On Bicycle Sales
The European Cyclists’ Federation has reported that Portugal has inscribed an amendment to the 2023 state budget, reducing VAT on bicycle sales in order to increase its cycling modal share to 10% by 2030.
This comes after the EU passed legislation allowing member states to apply reduced VAT rates on the supply, rental, and repair of bicycles, including e-bikes. Portugal is the first country to take advantage of this possibility, and Portuguese consumers will now be able to buy bicycles at the lowest VAT rate of 6% starting January 1st, 2023. This move will result in customers saving hundreds of euros when purchasing bicycles.
Opinion
This wider government move is an interesting model which other sovereign states could certainly research to see if it would have the same long term effect in their region. States normally have their own budgets and transport regulations and incentives which could benefit their own particular regions in different ways. However an integrated transport policy is an important part of any government’s future planning, tax breaks have been fundamental in the introduction of electric cars, especially in California, USA or Norway, which are hubs of electric vehicle usage.