While the details of how the tax will be put in place have yet to be made clear, one expert, Arno Sillat, said that a tax may be levied on cars which are currently being driven on the road.

Appearing on ETV morning show "Terevisioon", Sillat, former CEO of AMTEL, the main car market professional association, said that Europe-wide, three types of car tax can be identified.

These are: A registration tax paid when a car is brought into the country and changes owners; an annual car ownership tax, and third, a road tax, which could pertain, for instance, to a particular highway, he said.

The latter tax does exist in Estonia for heavier trucks, and is essentially an annual tax, Sillat added.

Sillat said there are 840,000 cars registered in Estonia, of which 650,000 are actually actively being driven on the roads.

This would make an average annual tax of a little under €200 per car per year, or around €15-€16 per month, while, Sillat added, there may be distinctions made on the basis of engine size and some other parameters.

"If we look at Europe, there is a very strong scrutiny placed on CO2 emissions, i.e. the green transition," Sillat went on.

"However, in fact, today we already know that with the addition of electric cars, a CO2 tax will at some point no longer replenish the state treasury; the fuel excise duty will fall, but nothing will replace it. The state could already start thinking today about the fact that if cars get taxed, then it should be cars being driven which incur that tax," he said.

"All of us who drive on the roads would pay, then this money goes directly to the road maintenance or goes, for example, to children's institutions, or to medicine or education or somewhere else. Then the car owners make their contribution."

Sillat added that since even this €15-16 per month may be too high a tax level for residents of rural areas, when introducing such a car tax, a combined option could be considered, for instance in relation to the registration tax levied when importing a vehicle.

In Sillat's opinion, this would also provide a protectionist stance for the Estonian market, since it would help curb the influx of older and more polluting cars, from the rest of Europe, to Estonia.

Representatives of the governing coalition have already said that the planned car tax in Estonia may come in two sections, the first, payable when purchasing a car, and the second, annually and linked to emissions and price, though more precise details are yet to be revealed.

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