A survey commissioned by the Institute for the Study of Societal Issues reveals that only 21 per cent of respondents support the planned implementation of a car tax in Estonia and 72 per cent do not.
The governing coalition of the Reform Party, Estonia 200, and the Social Democrats, who took office after the March parliamentary elections, wants to introduce a car tax in Estonia. In its latest flash survey, the Institute for the Study of Societal Issues asked people how they felt about the proposed tax.
The question asked to the respondents was: “How do you feel about the implementation of a car tax in Estonia?”, and 21 per cent of respondents said “I support it” or “I rather support it”, 72 per cent replied “I rather do not support it” or “I do not support it” and 7.2 per cent said “I don’t know”.
Eighty per cent of the survey respondents said they or a member of their household own a car. Of these respondents who have a car in their household, 18 per cent support the implementation of a car tax and 77 per cent do not. Of those respondents who do not have a car in their household, 35 per cent support the implementation of a car tax and 50 per cent do not.
Across all sociodemographic groups, there is a majority of respondents who do not support the implementation of a car tax.
Isamaa MP: Finance minister fails to grasp why Estonians use cars
The opposition Isamaa group in the Estonian parliament met with the country’s finance minister, Mart Võrklaev (Reform Party) to hear the ministry’s plans regarding the introduction of a car tax, and, according to Isamaa, no credible explanation was given at the meeting as to why it is necessary to increase the tax burden of Estonian people.
“The finance minister failed in presenting his talking points,” Isamaa MP Helir-Valdor Seeder said after the meeting. “Political parties and interest groups are being pressured to make a choice – the ministry has presented two versions of the car tax and are asking them to decide which one they prefer. In reality, any implementation of a car tax is unnecessary and unjust.”
Seeder stressed the importance of considering the context in which the new tax is being created – amid an unprecedented rise in the cost of living and along with numerous other tax increases.
“This has nothing to do with meeting the state budget or striving towards climate goals. It’s simply a redistribution of the tax burden of Estonians. The Reform Party is taking money from the people who have no other option in their daily lives but to use a car, in order to give tax benefits to those with higher incomes,” he noted.
“This is yet another example of how the Reform Party promises that people would be able to keep more of their money, but in reality, it takes much more away through taxes,” Seeder concluded.
SDE leader: the car tax should take into account regional specificities
Lauri Läänemets, the chairman of the Social Democratic Party and the Estonian interior minister, says the planned motor vehicle tax should also take into account the specificities of the different regions of Estonia, and the motor vehicle tax and the mobility reform of public transport should be addressed together.
“Further work needs to be done on the design of the uniform car tax proposed by the Reform Party so that the regional dimension is clearly larger and takes into account the differences,” he said in a statement.
“The car tax is a supporting component of the large-scale mobility reform, where a new level of public transport will reduce the number of cars driven in cities for the sake of the living environment.”
Läänemets, the head of the party that is the smallest political force in the three-party coalition governing Estonia, said that over the next four years, the government must invest at least two times as much in public transport as the car tax will bring in.
Two possible models for the car tax
“Our goal must not be to punish motorists who need to use a car on a daily basis, but to fundamentally reorganise public transport so that the daily mobility of the people of Estonia can be more environmentally friendly, accessible to everyone, and would value our time,” he said.
The finance ministry has put on a round of approvals a document of legislative intent, based on which a motor vehicle tax would be imposed on most vehicles in Estonia.
Two possible models for calculating the tax have been proposed in the legislative intent. The first model is based on the broader global and local environmental impact of the motor vehicle during its production, use and disposal, whereas the second model more narrowly focuses only on carbon dioxide emissions during vehicle use.
The car tax is scheduled to come into effect from 1 July 2024, and initially it will need to be paid for half a year. According to the plan, starting from 2025, the bill should be presented on 15 February. The date has been chosen so that people can use the refund from their overpaid income tax to pay it.