According to Mihhail Kõlvart, the chairman of the Central Party, the government must give up the car tax or else share the revenue from it with local governments, who can use it to help people.
“In order for local governments to be able to provide their people with the necessary services and provide them with social protection in difficult times, it is perfectly reasonable for the state to share the revenue from the motor vehicle tax with local governments in a similar way to individual income tax when introducing a motor vehicle tax. All the more so if the purpose of the motor vehicle tax is to impose an environmental tax on vehicles. Local governments have a central role in the implementation of climate policy and in the development and maintenance of transport infrastructure,” Kõlvart found.
He added that today the goal of the car tax can clearly be defined not as budget balance or environmental protection, but as the fulfillment of the main promise of the Reform Party, i.e. the restoration of a uniform income tax, the price of which is approximately 500 million euros. “The sales tax increase, the income tax increase, the car tax, the abolition of income tax benefits and the end of free public transport in the counties take away thousands of euros from families every year. It is absolutely clear that people with lower incomes, as well as large families and especially the elderly, will be hit the hardest by these decisions,” emphasized Kõlvart.
According to the chairman of the Center Party, the overall worsening of the economic situation will lead to additional expenses for local governments, especially in the social field. “For municipalities to cope, it is not enough just to redistribute the state’s money from rich municipalities to poorer ones, because the deepening crisis affects all people – regardless of the size of the municipality. The role of local governments will be to help those people who get into difficulties due to the government’s policy,” he added.
According to Kõvart, the government has clearly expressed the position in the past that municipalities could get additional money from additional taxes and their imposition. “However, with the motor vehicle tax bill, it is also planned to amend the Local Taxes and Tax Administration Act, during which, among other things, the autonomy of local governments will be reduced. At the same time, the opportunity for the local governments to decide on the tax themselves would disappear, and this is already a direct intervention by the state in the self-determination system of the local government,” Kõlvart explained.
