Italy to suspend car tax for 3 yrs on some autos

ROME, July 5 Reuters reported that in a new tax decree the Italian government said it will suspend a car tax on new eco-friendly compact vehicles for three years, a government source said on Friday.

The Italian government had been expected to introduce measures to help struggling carmaker Fiat (Milan:FIA.MI - News) out of a slump in sales and deepening losses.

A deep drop in Fiat's car sales is gnawing away at its market share around Europe as well as its bottom line, dragging the industrial group to a 529 million euro ($487.1 million) net loss in the first quarter of the year.

The tax break is likely to be scrutinized by the European Union.