Siim Kallas' car tax idea sparks wave of criticism

Cars. Source: Siim Lõvi/ERR

A recent remark by Reform Party honorary chair Siim Kallas, according to which Estonia's incoming car tax could be ten times what the government has proposed and reach €1,000 per vehicle, sparked painful reactions among members of the opposition and the public.

Center Party chief whip Tanel Kiik said in a statement sent to the media that leading Reform Party politicians are completely cut off from the everyday reality of ordinary people.

"At least they're honest as Siim Kallas makes no attempt to hide the fact. Estonian people and companies are struggling with rapid price hikes and recession further fueled by the government's tax hikes. It is extremely cynical to launch into a lecture and accuse people of hysteria in such a situation," Kiik wrote.

"A dignified existence in rural areas and daily coping must not be allowed to become a privilege of the wealthy. But that is precisely where your tax policy that is catering to the rich and complete inaction in addressing the economic crisis are leading us. I promise that the Center Party will oppose the government's tax insanity," the politician added.

Opposition Isamaa party head Urmas Reinsalu said that the Reform Party has become a left-populist force.

"The Estonian economy was in recession last quarter. But instead of promoting growth, the coalition is busy ordering new tax hikes that are set to deepen it and add to inflation," Reinsalu wrote in a comment. "It is typical left-wing policy to tax everyone for a society that's collectively worse off."

He added that this recent left-leaning rhetoric is made especially cynical by the fact the Reform Party promised not to hike taxes before elections.

Reinsalu said that owners of vehicles are not asking for benefits and that people simply do not want to see another tax. "There is nothing reprehensible about using a car, nothing that can be taxed as a vice. For most Estonian families, it is not a luxury but a practical necessity, and this includes families struggling to make ends meet."

"Kallas' attempt to set in contrast owners of vehicles and the rest of society supposedly forced to pay for road construction and maintenance is nothing short of ridiculous. The reality of the situation is that owners of cars already pay excise duties on motor fuel, the receipt of which far exceeds what is spent on roads," the Isamaa chairman added.

Martin Helme, chairman and whip of the Conservative People's Party (EKRE), told daily Postimees that the Reform Party has returned to its roots.

"Old communists building new communism for two kinds of people: those who rule and the rest who can eat cake."

The EKRE leader said that the Reform Party of today is the polar opposite of when it used to cater to the hardworking middle-class.

"This idea that a car is a luxury item is nothing but cynical mockery. It is no more a luxury good than electricity, even though [Reform chair and PM] Kaja Kallas seems to think that too is a luxury to have," Helme said.

Reform's coalition partners the Social Democratic Party and Eesti 200 did not comment on Siim Kallas' ideas.

Reform Party MP and honorary chair Siim Kallas wrote in an opinion piece published by Eesti Päevaleht that owners of vehicles should be expected to pay more than current car tax plans entail for an annual contribution of up to €1,000 per vehicle.

A million cars, €1,000 each would yield a billion euros with which to balance the budget and restore fiscal credibility, Kallas wrote in the piece, also suggesting that a society that desperately clings to public benefits needs to contribute accordingly.

The Ministry of Finance's current car tax plan would tax vehicles based on engine power, mass and age. The tax would be collected starting next summer. For example, the annual tax for a 2017 Skoda Octavia diesel would be around €145.


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Editor: Marcus Turovski

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