Võrklaev: Car registration tax is not enough, annual tax is also needed

Minister of Finance Mart Võrklaev (Reform).
Minister of Finance Mart Võrklaev (Reform). Source: Siim Lõvi /ERR

The Eesti 200 parliamentary group favors a car tax in principle, but believes Estonia should only have a vehicle registration tax. Finance Minister Mart Võrklaev (Reform) said that the annual levy should motivate car owners to purchase more fuel-efficient vehicles.

Võrklaev said that the Ministry of Finance and Climate Minister Kristen Michal (Reform) agree that the vehicle tax should contribute to the achievement of climate goals. He said that the registration tax preferred by Eesti 200 does not advance our climate goals.

"With only a registration fee our progress toward climate objectives would be extremely slow. We have feedback from the climate ministry from last week stating that we have take much bolder measures to reduce CO2 emissions in order to meet our goals," the minister said.

"If we were only talking about the registration tax, all the cars we have on the roads today would remain unaffected. In fact, for car owners, the point of the tax could be to swap their car for a more economical and smaller one. If we were to limit ourselves to the registration tax, we would still be accomplishing our environmental objectives but over a very, very long period," Võrklaev said.

Toomas Uibo, vice-chair of the Eesti 200 faction, told ERR that Eesti 200 does not support the car tax as a wealth tax and from the party's point of view it should clearly be a tax that would steer people towards using cleaner vehicles. The Eesti 200 has previously stated that it would only support a registration tax, but this would mean that the finance ministry's target of collecting €120 million a year through a car tax would not be met.

Võrklaev said that both registration and annual fees are required and that he explained this at the meeting today with coalition partners; 120 million is still the target, he said.

"The goal of this tax is to accomplish environmental goals by moving toward more sustainable mobility that reduces emissions while also contributing to the national budget. After all, sustainable mobility demands increasing investment year after year. /.../ So this (solution) is a compromise between a cleaner environment and people's ability to pay," Võrklaev said.

According to the finance minister, the goal of implementing the car tax by the middle of next year means that the draft car tax should be submitted to the Riigikogu by the end of September/beginning of October. "The timeframe is ambitious, but I am hopeful that we will be able to meet it," he said.

Like Uibo, Võrklaev pointed out that no one in the coalition doubts the necessity of the car tax, the question is rather in the details. "It is a rather complex issue, I think we need to be discussing it to clarify details and find agreement, but I think we have a common goal," he said.


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Editor: Marko Tooming, Kristina Kersa

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