The big news yesterday in Estonia was the solution that Finland is reportedly considering: to replace the car tax with a new kilometer-based fee that is calculated by the on-board tracking system, Eesti Päevaleht writes in its editorial.
Although the concept “Those who drive more must also pay more” that Finnish experts including Jorma Ollila made to the Finnish Minister of Transport will not be introduced in Finland before 2022, it is one possible development scenario for Estonia which does not have a formal car tax, but burdens its motorists with several indirect taxes.
Estonia has recently also seen similar attempts by the ruling Reform Party which attempted to decrease the VAT deduction on company cars. The response to Jürgen Ligi’s proposal showed that it’s not the right time to tax passenger cars in Estonia at present nor it is fair.
Reform Party has been trying to change the current taxation of cars by making sure that it does not break its election promises. The party says that it does not support car tax, but Ligi’s attempt was nothing else but to increase tax burden on car use.
One thing that Estonia could learn from Finns is the long-term vision of the Finnish government. If Finland decided in favour of the so-called kilometer fee, the county will have ten years to equip all cars with satellite navigation systems.
Estonia’s problem is that new cars are becoming more fuel-efficient which means that the state is receiving less money from fuel excise duty.