SDE leader: Car tax result of Reform's idea to abolish the 'tax hump'

According to Lauri Läänemets, leader of the Social Democratic Party, former Minister of Finance Mart Võrklaev's (Reform) claim that the car tax was the Social Democrats' idea is not true. Läänemets stated that the Social Democrats deliberately excluded a car tax from their most recent election platform, as it was proposed due to the Reform Party's desire to eliminate the income tax curve.
Läänemets' statement is noteworthy because up until now, government officials have justified the car tax primarily as an environmental measure. The stated goals were to reduce car dependency, encourage a shift to less polluting vehicles and address the issue of end-of-life vehicles.
"Mart (Võrklaev), I have a surprise for you. If you think you can salvage your reputation with a cabaret performance, throwing out false accusations in interviews that the car tax was the Social Democrats' idea, you are mistaken. Complaining about the Social Democrats didn't make you a great finance minister and it won't now," Läänemets wrote on social media.
The SDE leader reminded readers that their most recent election platform deliberately did not include a car tax.
"The car tax was introduced because the Reform Party wanted to eliminate the income tax curve. (Estonia's gradual income tax exemption reduction scheme — ed.) They had to find hundreds of millions of euros somewhere. Let me remind you, the Social Democrats proposed ten times not to go forward with this, which would have made new taxes unnecessary."
Läänemets added that he has pondered whether to laugh or cry over Võrklaev's statements but finds it hard to be angry with him.
"I know how much trouble you're causing within your own party because, in every possible way, you remind Estonians about the car tax — whether in advertising, stage shows or today's interview, which clearly requires my response."
Läänemets joked that if the Social Democrats were as omnipotent as Võrklaev claims, with the Reform Party adopting every suggestion they made, the Social Democrats would never have recommended a car tax.
"Progressive income tax, universal health insurance, raising pensions — maybe someone would have even suggested putting your head in the oven, as the old saying goes," Läänemets quipped.
As of January 1, 2025, Estonia's motor vehicle tax law has taken effect. All owners or responsible users of motor vehicles registered in the traffic register must pay the tax. The goal is to collect €230 million for the state budget.
Mart Võrklaev said on the "Otse Postimehest" webcast Wednesday that he was in favor of fewer taxes when serving as finance minister but was forced to start patching holes in the state budget due to previous overspending, adding that the vehicle tax was initiated by the Social Democrats.
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Editor: Marcus Turovski