Akkermann wants to channel car tax revenues into roads

Annely Akkermann.
Annely Akkermann. Source: Priit Mürk/ERR

Annely Akkermann (Reform), chair of the Finance Committee of the Riigikogu, is in favor of returning car tax revenue into road maintenance and the construction of new roads.

"There are schools of thought in public finance and budgeting, and I firmly adhere to this school, which holds that if we want to raise funds for something, we should ask taxpayers first if we need the roads, accessible public transportation or developed cycling paths, and explain that that's why we are hiking taxes," Akkermann told "Vikerhommik" on Saturday.

Asked if this meant, in her opinion, the proposed car tax revenue could be used to build and maintain roads, the head of the finance committee said, "Yes, and maintain it in the same way; after all, it costs about €200 million per year to maintain roads." In addition, there is still a need for road construction, and initiatives are currently underway. The European Union's money for building roads is coming to an end, and the last of the money from the financing period that has expired is currently being spent on construction — we need to find more money in our national budget to develop our road network."

Minister of Finance Mart Võrklaev (Reform), said that he will not designate the funds collected from the car tax for a specific purpose; rather, they will be deposited into the general state budget.

Akkermann added that the two options proposed by the finance minister for introducing a car tax do not exist anywhere else in the world: "Not least because it takes into account the fact that zero-emission, all-electric vehicles will also be required to pay road tax, as they require roads as well."

According to a study by the Foresight Center, a think tank at the Estonian parliament, while the use of fossil fuels declines, less money becomes available to maintain roads, construct new ones and subsidize public transportation.

Akkermann added that Estonia's tax burden is significantly lower than that of the countries whose welfare levels we aspire to: "In the big picture, you have to consider that if we want to live like the Nordic countries ― Finland, Sweden, and Denmark in the European Union ― their tax burden is around 43 percent of GDP, whereas ours is currently 33 percent of GDP."

She said the finance minister's proposals being criticized by his party colleague, Climate Minister Kristen Michal (Reform), is nothing unusual. "The fact that opinions differ even within the party is quite normal in debates of this nature and reflects the democratic nature of the party"

Akkermann said the Finance Ministry could have a draft of a car tax proposal available by the start of autumn, and that it could reach the state legislature in September-October.


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Editor: Mait Ots, Kristina Kersa

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