More specifically, the Commission mentioned the registration fee which comes as part of the planned tax, ETV news show "Aktuaalne kaamera" (AK) reported Wednesday.

The Ministry of Finance has pledged to decide within a few weeks whether to amend the bill, which has already passed its first Riigikogu reading (of three), or to dispute the matter with the European Commission.

Reform Party MP Annely Akkerman, a former finance minister who currently chairs the Riigikogu Finance Committee, told AK that in fact the European Commission's assessment had been milder than anticipated.

She said: "The European Commission is not categorically opposed either to the imposition or non-imposition of a registration fee."

Akkerman also referenced a decision regarding Romania made by the European Commission and the European Court of Justice, from nearly a decade ago.

In this case, a private individual had filed a complaint over a car tax implemented in that country, and the Romanian state was then required to refund incorrectly collected vehicle taxes to those who had paid it.

The committee is awaiting proposals from the Ministry of Finance by the end of this month, which would amend the car tax bill.

Since the Commission's letter only arrived in Estonia on Monday evening, Finance Minister Mart Võrklaev (Reform) said it was too early to specify what these amendments might be.

Võrklaev told AK: "Both options were included in the initial draft, applying it [registration tax] to all cars," meaning those purchased from outside Estonia as well as inside.

"Feedback was critical about applying it to cars within Estonia as well. We removed this from the bill, but we're aware of the risk, from the perspective of the European market, where cars are treated equally," the minister went on.

Võrklaev also would not rule out the option of disputing the matter with the European Commission, given the Romanian court decision referred to is from several years ago, while in the meantime, European climate objectives have significantly changed.

The European Commission's main issue with the new car tax in Estonia is that it is due only upon the initial registration of a vehicle within the Estonian traffic register, but not when selling a car in Estonia.

For this reason, it discriminates against owners of cars brought in from other EU member states, the Commission says.

Minister Võrklaev said completely abandoning the registration fee would be unwise, as doing so would eliminate its environmental goals, leaving the car tax solely as a means of filling state coffers.

The planned motor vehicle tax, due to enter into force in 2025, will consist of two parts, and is set to be implemented next year.

The first component is an annual tax that all vehicle owners must pay.

The second concerns the planned registration fee for cars brought into Estonia.

It is this latter portion that the European Commission considers to be discriminatory.

The car tax was first introduced in the Reform-SDE-Eesti 200 coalition agreement signed nearly a year ago, and has had quite a difficult birth, due in part to opposition to its implementation in general.

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