Car Owners' Association chief: Tax takes North Korea or Cuba as its example

Simmo Saar.
Simmo Saar. Source: Siim Lõvi /ERR

Simmo Saar, board member of the Estonian Car Owners' Association, has sharply criticized the draft car tax bill, which was published earlier this week. According to Saar, when drafting the bill, North Korea or Cuba appear to have been taken as examples on which to base its content.

"I would say that North Korea, which has very few cars and a lot of bicycles, has been taken as an example on the one hand, and Cuba on the other, where cars start to circulate on the domestic market because it is difficult to import them from outside," Saar said on Raadio 2's "Hommik!" program on Wednesday.

"So now, with this tax, people have finally got the personalized state that Eesti 200 promised. Perhaps we will see people sitting around making calculations to see how much [tax] will now be applied to their car and whether it ought to be seven years old or nine years old, 15 years old or brand new. There is more confusion than there needs to be with this car tax," Saar said.

According to Saar, the draft tax contains no environmental component, as in his view, the biggest tax burden will fall on those who have relatively economical cars that are only a few years old. Under the draft bill, it makes the same amount of sense to drive a car, regardless of how much it pollutes, he said.

According to Saar, the new tax also does not take into account the fact that some people may have several cars, which they use for different purposes. "If you have three cars, for example: let's say an everyday car, in the countryside, because, as an acquaintance from southern Estonia told me, you also have a spare car, because you never know when that Passat, Golf or Nissan Sunny is going to break down, and so then maybe you also have an SUV or a hobby car - then it's no longer going to be €50, it's three times €50."

"And another very important aspect that people don't see now is that if you do get a €50 euro car at some point, you're not going to be able to import it from Germany or Sweden at that same cost. It used to be that you paid for the car, brought it in, registered it, paid for the transport and that was it, but now there will be a tax for registering a used car," Saar added.

"It seems to me that the person who will be taxed the most, or the most disproportionately, is the person who has a car, which is between three and eight years old," said Saar.

"It is also incomprehensible, as to why the full weight [of a vehicle] is taken as a basis, because the full weight means that a car has a full tank, all its containers are full of fluids, all the passengers are in the car and the maximum amount of luggage is loaded on board. How many people do you know who drive around in a so-called 'full car' [like this]" Saar asked.

Saar also criticized the fact that while the original plan was for the government to recoup €120 million for the state budget via the car tax, the target is now €230 million, meaning there will be a need for a significant tax increase.

Saar also said, that while there were supposed to be more environmentally friendly transport options in order to provide alternatives to driving and encourage a reduction in car ownership, there are not.

"Where are these alternatives? Where can I see them, or how can I choose between them? We have to go back to the ideas stage. We can argue about whether the gross weight is two tonnes or 2,100 kilos, or whether a second-hand car should have an annual fee of €45, €30 or €60, but we need to go back to basics in order to see that, in fact, the Estonian public transport network, decentralized settlements and way of life leave a large number of people without any choice at all," he said.

"A lot of hobby car owners go to the gas station just as often as they go for a check-up. The question then arises of whether they too should they pay the full amount."

"At the end of the day, you can also say to someone, 'but sell your home in Võru or Valga, or sell your apartment in Kose and buy one in the city center - then you don't have to own a car at all, you can go shopping on foot and there's no problem whatsoever.' However, there are two problems here. First, not everyone can fit into the city center and second, not everyone has the money. It's the same as saying 'let's now go get electric cars.' If it so happens that at some point everyone in Estonia has an electric car, then first of all, where will the electricity come from to charge all these cars? That's one problem, and the other is that in that case the car tax will be raised even further, because then the fuel tax, which currently comes to over €500 million a year, will disappear," Saar said.

The Estonian Car Owners' Association previously collected nearly 80,000 signatures in a petition opposing the car tax.


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Editor: Michael Cole

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