Estonia's initial plan for a car tax was met with criticism from the European Commission as only requiring buyers of imported vehicles to pay a registration fee would amount to unfair treatment. The coalition has now ostensibly agreed that the registration fee will apply to every vehicle sold, including those already registered in Estonia.

"We're talking about the first time a vehicle changes hands. In other words, if you have a vehicle registered in your name today and you want to sell it after January 1, 2025, the registration fee will be due," said Eesti 200's Riigikogu whip Toomas Uibo.

The registration tax will consist of a base component of €300 to which components based on the vehicle's mass and emissions will be added for a lower registration fee than what was initially planned for new and imported vehicles.

"The fee is considerably lower now, cut more than half in some cases courtesy of a wider tax base," Uibo noted.

Previously, the new tax was forecast to yield €240 million in tax revenue.

"I think that the sum reaching the state budget at the end of the day will be more or less the same. The question now is how to collect it without violating EU common market rules," said Annely Akkermann (Reform), chair of the Riigikogu Finance Committee.

Akkermann also said that tax revenue will fall in subsequent years because the registration fee is due only the first time a used vehicle changes hands.

However, Lauri Läänemets, leader of the coalition Social Democratic Party, told ERR in a written reply that the party has not had time to discuss the new version of the car tax plan yet.

The Ministry of Finance is set to unveil the new plan in more detail in May.

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