French universal vehicle tax mooted to offset falling fuel revenues

A universal annual vehicle ownership tax, with rates adjusted according to environmental and social criteria, has been proposed to make up for falling fuel tax revenues as a result of the growth of electric vehicles (EVs).

How the tax would work

The Institut Mobilités en Transition think-tank says some form of vignette (the name given to the old tax discs on cars) on all vehicles from 2030 will be the most practical way of dealing with the problem.

The average cost of the vignette would be €140 a year for a privately owned car in 2030, according to the think-tank, rising to €260 in 2035. However, the amount would not be uniform. Adjustments would be  made according to the type of vehicle, as well as the owner's income, place of residence and the number of vehicles owned by the household.

It suggested a very low-income household living in a suburban or rural area and owning a single, lightweight electric car manufactured in Europe could pay approximately €30 per year in 2030 for the vignette. 

This would rise to €910 for a household in the wealthiest 20% of the population, living in a city centre, owning several vehicles and using an old, particularly heavy petrol or diesel car.

Reassurance for EV owners

“We know, especially in this pre-election period, that new taxes are not popular, but the big advantage of a vignette is that it will reassure people who have bought, or who are thinking of buying, electric vehicles,” Antoine Trouche, one of the leaders of the report team, told The Connexion.

“One of the worries people have about electric cars is that they will be hit by taxes per kilometre, as has been proposed in the UK, or by a sharp rise in the price of electricity.

“This way we can ensure that our roads are maintained and prepare our transport infrastructure for the impact of climate change.

“At the same time we can be fair, with motorists in a rural area with a low-salary job paying less than someone with a car in a city with public transport and a high-salary job.

“We see it as the best way to take into account environmental and social concerns.”

A fair contribution to public finances

The IMT calculates that the average motorist in France currently contributes €940 per vehicle per year in taxes of various types.

In total, the state takes €67.5billion from motoring taxes, which is split between the national government, local government and social security systems.

The main tax is fuel and natural gas excise duty, which brought in €27.7billion in 2025, according to the IMT, to which VAT on the sale of fuel brings in an extra €8.9billion. 

Other parts of the tax revenue include VAT on vehicle purchases (€7.4billion), levies on motorway concessions (€6billion), the mobility payment tax (€5.6billion), and the tax on insurance agreements (€5.2 billion).

According to the report's projections, road taxation would fall from 4.6% of public-sector revenue in 2025 to 3.4% in 2035 if the rules remained unchanged. The institute estimates that electrification would account for approximately half of this relative decline.

It said a vignette, along with smaller tweaks to the tax system, would ensure that motorists continue to contribute to public finances, at the same proportion as they did in 2025.

A car tax disc was previously introduced in France in 1956. Its abolition for private individuals was decided as part of the 2001 budget, before the scheme was subsequently phased out for business users.

Mr Touche said he did not know if the proposed new vignette would take the form of a paper disc, like the old one,  or if it would be electronic.

“That would be for the government to decide,” he said.