Higher fuel tax has cost Estonia €50 million, hauler associations say

Filling up the tank in Estonia costs a great deal more after fuel excise taxes were increased.
Filling up the tank in Estonia costs a great deal more after fuel excise taxes were increased. Source: (Siim Lõvi/ERR)

Organizations representing haulers in Estonia have issued a joint statement to two standing committees of the Riigikogu urging them to discuss the situation of the road haulage sector, as the country has lost an estimated €50 million in tax revenue due to higher fuel duties this year.

As a result of decisions made by the state, the Estonian road haulage and transport sector has lost its competitiveness and is no longer sustainable, the associations say. This year, some 100 million liters of motor fuel have been purchased in neighboring countries instead of Estonia.

The Estonian Logistics and Freight Forwarding Association, the Association of Estonian International Road Carriers, the Estonian Association of Motor Companies and the Estonian Oil Association are urging the Finance and Economic Affairs Committees of the Riigikogu to initiate a discussion regarding the situation of the country's road haulage companies, which, in the current tax and economic environment, are unable to compete with significantly more favorable conditions offered by neighboring countries.

So far this year, an estimated 100 million liters of fuel have been purchased by haulers in neighboring countries instead of in Estonia, and this total is set to increase to 130-160 million next year, according to the associations. This translates to €49 million in foregone taxes for Estonia in 2017 and up to another €79 million next year.

The associations have identified cutting the rates of the fuel excise duty to reduce inequality compared to neighboring countries as a first step in restoring the competitiveness of the Estonian road haulage sector. An alternative to this measure would be to introduce a tax exemption or tax refund for haulage businesses.

In addition, the associations would like for the state to establish mechanisms ensuring that the road user fee is not levied on Estonian transport companies alone, but paid by foreigners using Estonian roads as well.

Editor: Aili Vahtla

Source: BNS

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