Italian Bicycle Incentives Prove Runaway Success

by Ulrika Lomas, Tax-News.com, Brussels

05 October 2009

You've heard of the success of 'cash for clunkers' schemes in various countries. Well the Italian Ministry of the Environment has announced that the funds allocated to the government’s eco-incentive scheme for the purchase of bicycles were exhausted within four days, following the scheme’s introduction on 25 September.

The incentive for the purchase of an approved bicycle was fixed at 30% of its list price to a maximum of EUR200 (or a maximum of EUR450 for an electric motor-assisted product). Bicycles could be purchased through a total of 5,000 approved sellers.

The EUR7.7m (USD11.3m) set aside by the government under the scheme financed the purchase of 57,000 bicycles worth almost EUR22m. At an average usage of the incentive of EUR130, the average cost of the cycles was around EUR400. The success of the new scheme exceeded by far the 20,000 bicycles sold in ten days during the previous incentive scheme in 2008.

Now that the funds provided to the bicycle incentive scheme have been exhausted, the similar incentive scheme for the purchase of new mopeds is planned to begin on October 5.

Under that scheme, to which has been allocated a total of EUR5.1bn, up to 20% of the list price of a moped conforming to Euro 2 standards (with a maximum of EUR500 for a four-stroke or EUR180 for a two-stroke model) will be financed. In this case, however, the purchaser will need provide the old Euro 0 or Euro 1 model to be scrapped at the same time as purchasing the new moped.

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