Eesti 200 wants car tax to be transformed into environmental tax

Toomas Uibo.
Toomas Uibo. Source: Priit Mürk/ERR

Toomas Uibo, a member of the Economic Affairs Committee and vice-chair of the Eesti 200 parliamentary group, said that the proposed car tax should be tailored to address environmental concerns instead of wealth inequality. He said that this is why Eesti 200 opposes the current plan proposed by Finance Minister Mart Võrklaev (Reform).

Uibo said that Eesti 200 does not support the car tax as a wealth tax and from the party's point of view it would clearly be a tax that would steer people towards using cleaner vehicles. "From our perspective, this is the core premise of this tax, and we are pleased to see that the Minister of Climate (Kristen Michal, Reform - ed.) also supports it and has come up with his own recommendation, which we believe contains a number of good suggestions for how to design this tax," Uibo told ERR on Monday.

However, he said that the coalition is not in disagreement on whether or not a car tax should be implemented: "It is agreed in the coalition agreement that it will come. But the specifics of it are still to be clarified."

Uibo also said that a working group of representatives of the coalition parties had been set up on Monday to prepare the introduction of the car tax and that Finance Minister Võrklaev (Reform) had also attended the meeting.

"The Finance Minister's draft [plan to implement taxes] raises a number of problems for us, and there was a very good discussion today with the coalition partners," he said. "But in the form in which it has been proposed today it is not exactly what we support," he said.

Võrklaev's plan, which would introduce both an annual tax and a one-off registration tax on cars, would raise €120 million for the state budget. However, Eesti 200 said that they would be in favor of a registration fee only, which means that collecting such a large amount would be out of the question. Uibo did not clarify how Eesti 200 sees this problem to be solved.

"If we are talking about establishing a car tax at all, the main objective is still the environmental issue, the environmental aspect. Our car fleet is one of the most polluting in Europe, which for us is a problem. We can find ourselves in a situation that we are paying pollution fines by 2030,  because we are not meeting the agreed pollution levels. We must figure out ways to avoid paying those fines," he said, referring to possible EU sanctions.

"The planned car tax is projected to generate a certain amount of revenue for the state. We would really appreciate more accurate figures. Clearly, this is an issue that requires further discussion, and the partners agreed that today's discussion alone will not be sufficient and that we could meet again," Uibo said.

The representative of Eesti 200 added that he was waiting for the minister's thoughts on how to handle the problem of so-called phantom cars, i.e. ensuring that owners of cars that are on the register but have been out of use for a long time are not taxed as well.

He also assured that discussions on the car tax are not blocked by the party: "No, I don't think it's deadlocked. I think it's a very good debate, which naturally goes along with the development of all these kinds of laws; such disagreements are fairly common."


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Editor: Mait Ots, Kristina Kersa

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