Finance minister: Draft car tax bill more focused on environmental impact

Mart Võrklaev.
Mart Võrklaev. Source: Siim Lõvi /ERR

According to Estonian Minister of Finance Mart Võrklaev (Reform), the ministry is still working on the final details of the much-discussed draft car tax bill. However, according to Võrklaev, the draft, which is set to be published on Monday, will take the environmental impact of vehicles into account more than previous versions.

"The signature will probably come on Monday. Then, the plan is to make the draft car tax bill public and also to share more detailed information about what has been done in the meantime regarding the proposals and amendments that were made," said the Minister of Finance.

According to Võrklaev, the consultation period could last three weeks.

In the latest update to the draft, changes have been made in relation to the way the tax will be applied.

"Based on the feedback, there was a desire for it to be more clearly environmentally oriented. So, we have taken a stronger position on CO2 and the clear direction that if a car is CO2 emitting, then the tax will increase faster. We have also brought in a weight component, whereby larger and heavier cars above a certain threshold will pay more," said Võrklaev.

According to Võrklaev, the tax also takes into account weight differences and vehicle engine types.

"The weight limits at which the tax starts to increase are different. For a gasoline or diesel car, the amount starts to increase faster due to the smaller weight," he said.

"The payment still comes from both components - from the registration and the annual tax," Võrklaev added.

The much-discussed tax will also take into account the age of vehicles, as it is understandable that not all people will be able to buy new cars immediately, the finance minister said. "In my opinion, this is more or less the same logic as that of the draft  proposal," he said.

The draft also provides an exemption for vehicles, which have been adapted to better meet the needs of people with disabilities.



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Editor: Michael Cole

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