Chamber of Commerce does not support motor vehicle tax in its current version
The Estonian Chamber of Commerce and Industry wrote to the Ministry of Finance that it does not support the introduction of any new taxes, including motor vehicle taxes, in the current economic downturn. The Chamber of Commerce understands that one of the important objectives of the introduction of motor vehicle tax is to increase the revenue of the state budget, which is related to the desire to move towards the balance of the state budget, but this objective must not be prevalent or rely on attempts to collect more tax revenue through the introduction of new taxes.
If the Ministry of Finance considers the movement towards the balance of the state budget to be a more important objective than maintaining or improving the competitiveness of enterprises and nevertheless wishes to continue the proceedings on the draft Motor Vehicle Tax Act, the Chamber of Commerce has submitted several proposals to amend the draft.
The Chamber of Commerce made a proposal to omit from the draft the clause that provides for the age-dependent annual fee and registration fee of motor vehicles for private persons. In the opinion of the Chamber of Commerce, the current solutions are contrary to the polluter pays principle. In its petition, the Chamber of Commerce also points out that the annual tax should be paid only on vehicles registered in the Estonian motor vehicle register that are in active use and have valid motor insurance and that the period of taxation would be related to the validity of motor insurance.
In addition, the Chamber of Commerce recommends creating a separate solution to the problem of phantom vehicles, which will allow the owners of phantom vehicles to delete the phantom vehicle from the register more easily than before, and also recommends introducing regulatory or non-regulatory solutions in order to enhance supervision over the introduction of motor vehicle tax in order to ensure that due to the new tax, vehicles registered in the Czechia, Lithuania or other countries will not be driven even more on Estonian roads on a permanent basis in order to avoid payment of motor vehicle tax in Estonia.
The Chamber of Commerce also wishes to know what is the purpose of introducing a motor vehicle tax, because according to the explanatory memorandum, the purpose of introducing a motor vehicle tax is, among other things, to encourage people's car choices towards vehicles that are less burdensome on the environment and to support the abandonment of using a car. A recent Norstat survey commissioned by the Chamber of Commerce showed that 35% of respondents have driven a car less or the same amount in the last two years, but have done so more sustainably (smaller cars, lower fuel consumption, electric cars, etc.). This shows that people are motivated to make their car use more sustainable even without a motor vehicle tax and have been actively doing so recently.
In addition, the Chamber of Commerce wants to know what is the intended purpose of the motor vehicle tax and therefore wants a provision to be included in the draft act according to which the money received from motor vehicle tax in the state budget must be used for the maintenance and development of road infrastructure and for the promotion of less polluting mobility.
"The introduction of a new tax would reduce the competitiveness of companies and does in no way help to overcome the recession. In the current context of the economic downturn and security crisis, the fiscal balance may also be achieved at a slower pace, which would be more manageable for the society. At the moment, improving or at least maintaining the competitiveness of the business environment should be a more important priority for the state than the balance of the state budget, but the introduction of a motor vehicle tax runs counter to this goal," emphasised Mait Palts, Director General of the Estonian Chamber of Commerce and Industry.