Kerala State Budget 2025: FM Proposes 50% Road Tax Hike on Private Vehicles Over 15 Years
To reduce pollution from private vehicles, the government will raise the road tax by 50% on vehicles over 15 years old.
FM K N Balagopal budget – private road tax – older vehicles road tax – Taxscan
FM K N Balagopal budget – private road tax – older vehicles road tax – Taxscan
Finance Minister K.N. Balagopal unveiled the Kerala Budget for the 2025-26 fiscal year in the State Legislative Assembly on Friday, February 7, 2025, marking his fifth and final full budget under the second Pinarayi Vijayan government. In his speech, the FM highlighted several initiatives aimed at reducing environmental pollution, which has become a growing concern for the state.
The Central and State Governments have been taking significant steps to tackle pollution, with one notable measure being the restriction on government vehicles over 15 years old. These older vehicles are no longer allowed to run on the roads, and the State Government has also announced a scrapping policy to phase out such vehicles, aiming for a cleaner and greener environment.
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However, private vehicles, including two-wheelers, three-wheelers, and motor cars, have not been subjected to similar restrictions. In a move to discourage the continued use of older, polluting private vehicles, the government has decided to increase the road tax on these vehicles by 50% if they are more than 15 years old. This step is expected to reduce pollution and encourage vehicle owners to either upgrade to newer models or dispose of their old vehicles in an eco-friendly manner.
At present, the government collects Rs. 110 crore annually from road taxes on private vehicles. With the new tax increase, the state is expected to gain an additional Rs. 55 crore in revenue. This extra income will support the government’s ongoing environmental initiatives and help fund the transition towards more sustainable transportation in Kerala.
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By targeting older private vehicles, the state aims to reduce harmful emissions while also generating funds to invest in cleaner alternatives, infrastructure, and other critical programs. This comprehensive approach is part of the broader strategy to make Kerala a more environmentally conscious and sustainable state.
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