University rector: There is no good model for car tax in Europe

Even though car taxes have been introduced in one way or another in other EU countries, according to Enno lend, rector of Tallinn's TTK University of Applied Sciences, there is currently no ideal model that Estonia could use as an example to follow.

In other EU countries, car taxes are applied differently and according to a number of factors, including the weight or length of vehicles, the type of fuel and the amount of CO2 emissions. However, in Lend's view, the best approach to car taxes has been taken by Norway.

"I haven't come across a really good model. I can give you an example of a model that has been very effective in influencing car owners' behavior and making the environment greener: Norway," said Lend.

"In Norway, all electric cars were exempt from VAT. They were free to drive on roads and tunnels, and subsidies were provided. What happened at the beginning of this year, when nearly 80 percent of the cars were electric, was that state tax revenues fell. Additional taxes have now been introduced, whereby if the price of a car is over 500,000 NOK, which is approximately €45,000, then people have to pay 25 percent VAT, plus I think it was (an extra) 12.5 NOK per kilogram (in weight). Electric cars are heavier," said Lend.

In Norway, car taxes and fees are currently set at 25 percent VAT for vehicles costing over 500,000 NOK, as well as 12,5 NOK for every kilogram the car weighs over 500 kg.

Asked about the preliminary plan put forward by the Estonian Transport Administration (Transpordiamet) on Friday, Lend said he personally doubted that the regulations would lead people to opt for greener alternatives.

"First of all, the (CO2 emission) rate bands are too small: 120, 140 and 160 grams per kilometer (G/km), said Lend.

"In fact, the total emissions per month also depend on mileage. If I drive a small car 20,000 km and a Toyota Land Cruiser 10,000 km, then the total emissions per year will be the same for both," he added.

According to Lend,  calculating emissions according to the methodology, which has only been in use since 2018, could also be a problem.

"When buying a car, car owners have looked at the description and there it says 5.5 liters per 100 kilometers. (But), the actual consumption (for older cars) is maybe 6.5 to 7 liters. With older cars, we were told that they were more economical and produced less CO2. (However), the actual figures were always higher than was shown," Lend said.


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Editor: Michael Cole

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