Finance minister: We want longer discussion on car tax

Mart Võrklaev.
Mart Võrklaev. Source: Jürgen Randma / Government Office

The Minister of Finance Mart Võrklaev (Reform) said that the implementation of the car tax was delayed to enable for a more in-depth, broad discussion.

Initially, the car tax was scheduled to go into effect on July 1, 2024. During budget discussions Võrklaev proposed delaying the implementation, he told ERR.

"You can see that it has generated a wide debate in society, and I think that a somewhat calmer debate and listening are necessary, and, as a result, there will be a better outcome for everybody. We will get a better law, people will understand it better, and we will understand each other better," Võrklaev said.

"There will be a car tax, but it will not be implemented until January 1, 2025. And the reason I advocated a six-month delay was because it is a new tax, we prepared a proposal in the summer, there has been a heated debate in society, and it has received a lot of input. This draft is nearly complete today, but if we were to include these revenues in the 2024 budget, we would have had to work within the budget framework for 2024. That meant this draft would have had to go through the approval process in about a week. But I wanted a somewhat larger debate on this draft," the minister said.

In a few weeks, Võrklaev plans to present the manuscript to the public and submit it for approval. According to him, the duration of the deliberations could range from two weeks to one month.

Võrklaev plans to submit the draft car tax bill to the government and state legislature in November, with ratification occurring in the first months of 2024 and implementation commencing at the beginning of 2025.

The government hoped to collect €60 million for the 2024 budget from the car tax. According to the latest version of the draft, the tax is expected to generate around €200 million a year.

"Different options were explored and we came up with a viable plan for 2024, so that our structural position remains at the same level as this year, which is in line with budgetary rules when times are tough. And the other thing is that we are still improving nominally from somewhere around 3.5 percent to 2.8 percent. In any case, we will cut public spending, but at a slightly slower pace next year," Võrklaev said.

Võrklaev did not yet want to say how big Estonia's state budget will be in 2024.

"I wouldn't put a number on it at the moment because yesterday we got the basics together, and today the officials have been working through the day putting together this whole final plan. I've had a very busy day, and I haven't asked for the latest information," he said.


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Editor: Aleksander Krjukov, Kristina Kersa

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