The Conservative People's Party of Estonia (EKRE), Isamaa and the Center Party proposed to suspend the second reading of the draft, but this did not find general support. The vote was cast with 21 members in favor and 47 against.

During the second reading, two fundamental changes were made to the draft: first, the registration tax is extended to the first transfer of ownership of vehicles already registered in the Estonian road register, and second, the tax on passenger cars and vans of legal persons will also start to decrease with the age of the vehicle.

According to the draft law, Estonia will introduce a two-part vehicle tax from next year. According to the draft, the tax will consist of one part to be paid annually by the owner of a motor vehicle on vehicles registered in the road register. The vehicle tax for passenger cars will consist of a basic component, a component based on CO² emissions and a component based on gross vehicle weight. Secondly, a vehicle registration fee will be introduced, to be paid upon registration of passenger cars and vans.

The aim of the car tax is to encourage people to make greener choices when buying a new car and to support the end-of-life management of old cars. The tax will make the purchase and ownership of passenger cars 5-15 percent more expensive than today.

According to the bill, vehicles owned by individuals that have been converted or adapted for use by the disabled, and vehicles owned by foreign missions in accordance with foreign agreements are exempt from vehicle tax and registration fees.

The vehicle tax will be collected by the Estonian Tax and Customs Board (ETCB) and the registration fee will be collected by the Estonian Transport Administration, the bill states.

The amendment provides that in addition to the initial registration of a vehicle, the registration fee is also due upon the first change of ownership of a car, provided that no registration fee has previously been paid for that vehicle. The amendment also reduces registration fee rates so that the average cost is less than 10 percent of the approximate value of the car. Under the bill, registration fee rates will increase in 2028 and 2031.

There is no registration fee if you buy a vehicle from a leasing company and register it in your own name, or if you register a vehicle you inherit. You will be charged a registration fee at the time of the next sale. Vehicles up to 10 years old that are taken out of the country will be able to apply for a refund of the registration fee under the amendment. The age of the vehicle will reduce the amount of both the registration fee and the vehicle tax – for both individuals and legal entities, and for both passenger cars and vans.

Center Party promises to go to court

If the Riigikogu approves the car tax bill in its current form, the Center Party will take the matter to court, as parliament has violated the Constitution both in the content of the bill and in the procedure, Mihhail Kõlvart, leader of the Center Party, said.

Kõlvart said that Article 28 of the Constitution stipulates that families with many children and people with disabilities are under the special care of the state, but the draft car tax does not make any special provisions for them.

"People with disabilities are forced to modify their cars in order to get the car tax exemption. A situation where the most vulnerable members of society are made to suffer much more, without any mitigating measures being offered, is a very serious violation of a fundamental right," Kõlvart said.

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