Provisional version of proposed car tax combines one-off and annual fees

The initial draft of a proposed car tax would entail a one-off levy on car registration, plus an annual tax expected to cost between €60 and €240, depending on the vehicle's engine size, power and age

A more official version of the proposed car tax should reach the public in the second half of July, ETV news show "Aktuaalne kaamera" (AK) reported Wednesday.

The tax was an unexpected addition to the coalition agreement signed between the Reform Party, Eesti 200 and the Social Democrats, back in April.

Preliminary outlines of the proposed tax were presented at a round table of officials and interest groups several weeks ago.

Reform Party MP Mario Kadastik told AK that: "This proposed car tax is planned in two components. One would cover the initial registration of the car in question; the other is as an annual fee."

This fee can be paid on a monthly basis, which provisionally would run between €5 and €20 per month, again depending on the vehicle's details.

"The registration component is based on ... a percentage of the purchase value. The annual tax could be calculated at somewhere between five and 20 euros per month," Kadastik, who sits on the Riigikogu's economics committee, went on.

"This depends on the car. If you were to take a small Smart car versus a large Dodge Ram, for instance, there is quite a major difference between the two vehicles. Much depends on the car's emissions and power, its weight, age – these are the components from which the tax will be assembled."

All motor vehicles, save for heavy trucks, which have their own taxation system, would be subject to the tax, regardless of whether the vehicle is running on the roads or not.

Lobby group the association of car owners (Autoomanike Liit) says is opposed to any kind of car tax, adding that in reality, such a tax already exists in Estonia.

Priit Tammeraid, head of the association, said: "It is quite wrong to state that there is no car tax in Estonia at present. We have a fuel excise duties. All car owners have to pay this when they drive a car. How much they pay here also depends on how much they pollute."

Meanwhile, ride-hailing and car rentals firm Bolt says it generally supports the introduction of the tax, however, arguing that it would would make more people give up their personal, private cars.

Bolt's head of government relations Henri Arras said: "The car, as a primary means of transport, causes a lot of issues in cities. We generally support the development of environmentally sustainable modes of transport, and we can see that this is one measure that helps to quietly nudge transport over from a car-centric nature, to a focal point of better alternatives:"

The Ministry of Finance said it was unable to comment on the topic until the official draft of the tax us ready, as noted later this month.

AMTEL, he representative organization of car dealers and service providers, also declined to comment.


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Editor: Andrew Whyte, Merili Nael

Source: 'Aktuaalne kaamera', reporter Mart Linnart.

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