Estonians With Cars in Finland Targeted in Tax Blitz (11)

Published: 31.05.2012 09:33

Photo: Postimees/Scanpix

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Finnish police and customs are cracking down on people who have moved to Finland with vehicles but are not paying the country's steep taxes on car ownership - something that is foreign to Estonians.

On May 30, an extensive blitz took place near Helsinki. Fifty out of 100 drivers stopped on the basis of having a foreign registration plate were issued citations, and cars were confiscated in two cases, ETV reported.

The Customs Board says there are 50,000 cars in Finland registered in another country, most of them in Estonia.

As of May 1, 35,000 Estonians lived in Finland, according to the Finnish Population Register. Many if not most presumably drive their own vehicles, ETV reported.

Although re-registration is considered expensive, it is possible to get an exemption. However that only applies if Finnish customs is notified on the day of the move to Finland.

The Finnish car tax consists of four components: the car's price on the Finnish market, the year of the model, the engine size and environmental impact.

Finland also levies a separate fuel tax, 400 euros in the case of a gasoline engine and 1,000 euros for a diesel.

Meanwhile, Estonia has no comparable taxes - other than a high excise duty on fuel added to the price at the pump - and has no plans to establish them, said Finance Minister Jürgen Ligi in an interview on ETV yesterday.

The European Commission recommended to Estonia on May 30 that an annual car tax, energy consumption taxes, ownership or registration tax and waste tax could help achieve environmental aims and reduce the tax burden on workforce.

Increasing taxes on spending and reducing them on the workforce is a government priority.

"The list does not specifically mention a car tax on the list, although the Commission does mention it in the analysis as a possibility," said Ligi. "But we have a high enough fuel excise and we don't want to put the clamps on car owners anymore. It would be regionally painful as well, as in many areas, car transport is the only option."


Kristopher RIkken

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Comments (11)

  • Fairer

    31.05.2012 10:17

    The Estonian system of taxation through fuel use is much fairer. Those who use the most, drive the most and pollute the most pay the most. While ownership taxes places a relatively high burden on those who simply own a vehicle but use it little.

  • Joao Rei

    31.05.2012 10:24

    Estonia should really consider introducing a car tax based on engine size and pollution emissions. It could use the money to fund better rail networks and public transportation in cities.

  • karLcx

    01.06.2012 02:58

    when incomes with finland are comparable, perhaps tax regimes like finland's will also be a good idea.

  • Fairer

    01.06.2012 11:28

    @Joao, larger engines use more fuel and pay more fuel taxes as a result. If more money is needed they should increase the fuel tax, which taxes those who use and pollute.

  • Joao Rei

    01.06.2012 16:34

    @Fairer, you're probably right. A tax on fuel makes sense as a disincentive to the usage of cars in general and gas guzzling vehicles in particular. But to me, (and this is just my opinion) I would still tax car ownership, since I think that car ownership should not be promoted, specially for those living in cities. I understand that for some living in the countryside, a car is the only way to "move around"...

  • Dane

    04.06.2012 14:44

    It gives no sense to advocate for a higher car owners tax in Estonia based on the article above ?? , it concerns the part of the Estonians that LIVE and WORK in Finland and of cause they should pay the same tax as the normal Finnish person , they ask the same salaries and enjoy the same socials and therefore shall of cause contribute the same way , anything else would be nonsense!

  • Fairer

    04.06.2012 16:07

    @Dane, if the Fins would abolish their road/car taxes and put all those tax on fuel then all those Estonians living and working there would be paying regardless of where their car is registered. @Joao, which is another reason to just tax the fuel as foreigners also pay their fair share that way. Car use in cities is better discouraged through parking levies and permits.

  • Mustkaru

    06.06.2012 11:21

    Finnish police focusing routinely on foreign registered cars is a violation of EU regulations of free trade and movement. Finns go to extremes while enforcing their vehicle taxation. Finnish car registration tax system is designed to prevent private people from importing cars from another EU-country and to protect interests of bigger Finnish companies giving them a de-facto monopoly of car imports. It is a kind of system that Estonia definitely does not need. It is not uncommon to see 20-30 old vehicles in every day use in Finland due to inflated car prices through all the spot taxes. One can imagine how this affects to road safety and environment also.

  • Dane

    14.06.2012 14:20

    @mustkaru , if there should be any meaning in your statement then it should be safer in Estonia because the market is free and cars are newer ? I am sad to burst your bobble , but that is simple not correct , I have seen cars here in Estonia that are 2-3 years old , but in so bad condition that they are a serious hazard to safety. It is fully legal for Finland to have a domestic taxation as they see fit , and as long anyone can buy a car in Finland , then it will not have an influence on the work force movement. Again , if you want to have the benefits of for an example Finland ( higher salaries , better living , infrastructure , hospitals and socials ) then it is only fair that you also contribute to the cost by paying the full tax also on cars as well as all other taxes. In Denmark the system are similar to the Finish model and everyone that comes to Denmark will get full socials and child support ( 160€ pr month pr. child until 18 ) , all travel and living expenses are deductible in tax so it leaves the individual with a tax on salary on around 28,45% ( Estonia equivalent is 21% + 34,4 % = 55,4% ) so no wonder that additional taxes are imposed. Soon Estonia turs a sharp corner with 500.000 persons on or ready for old age pension , if the Estonian goverment should have any chance of paying this + the effect of all the deflation made in this nice country , then same sort of "hidden" tax will be a reality in near future also in Estonia.

  • Anti-tax

    14.06.2012 15:25

    Strange Scandinavian taxes can be shoved where the sun don't shine. TV tax, car owner tax, seriously? Estonia's tax system is perfect. Everyone pays the same percentage, and with what's left over you can choose to do anything you bloody well want to. This is a free country. You can't sneeze in Scandinavia without paying a snot tax.

  • dane

    17.06.2012 19:12

    @anti-tax : I agree , nothing would be better than a brutto tax as the one that are used in a degree in Estonia , but the sad part is that it will not keep beeing enough , the development in the population and rising costs in genneral will amplefi the need of more money to be paid in tax. Example 1 : Soon Estonia will pass 40% of the workforce as pensioners and / or on sickleave , this is not financed and will need a lot of money ! Example 2 : 30% of the Estoinan BNP are directly or indirectly driven by EC support , this are gradualy on the decrease and will have a huge impact on the amount of tax paid. My point is not that i want more tax in Estonia or that i think tax is a good idea , but fact is that more money is needed and therefore a increase in tax will come , the only thing we can do is try to pull in a fair direction and a sipel direction to avoid the complexity that are overflowing in for an example Scandinavia