Speaking in front of the parliament on October 9, Finance Minister Mart Võrklaev confirmed that the current government will not raise taxes, but rather lower them. A few hours earlier, at the press conference, he had given an overview of the introduction of the car tax, which must bring 230 million euros to the state budget. The noble goals of this tax are presented with the same confidence, but it is not an environmental tax at all, but rather a property tax, a measure to get money from car owners.
What problem does the car tax solve?
Observing the government’s communication, one gets the feeling more and more that the public is approached with the assumption that the target group is a bunch of simple-minded people who can be told anything – although the sound of a soft voice is soothing. When introducing a car tax, they talk loudly about reducing the environmental impact and reducing the use of cars, but in reality they are looking for permanent additional money in the state budget to be used to cover current costs.
If the finance minister was sincere about the goal of reducing the environmental impact, his tax plan would also be followed by a national measure to renew our people’s car fleet. After all, it is obvious that no one voluntarily chooses an old, worn-out machine with little security for their daily tasks. Still forced by circumstances, because there is simply no money for a newer one. Examples of such campaigns, where people are helped to purchase new vehicles, can be brought from near and far.
People all over Estonia know how to count money and understand the poor state of the state budget – although it may not seem so from the perspective of the super ministry. The state’s finances would be in much safer hands if Minister Võrklaev gathered the courage and spoke about things by their proper names. Of course, it is understood that the state needs to collect this money, but it is not necessary to organize it by doing greenwashing in the guise of a car tax, but simply to say quite honestly: the situation is shit, we need help.
Our people know that in addition to Ukraine, rockets are now flying in Israel as well, and that this cannot be beneficial to the general economic environment and the accumulation of wealth in Maarjamaa. In exactly the same way and for these reasons, the need to contribute more to national defense than before is understood.
However, we hope that these wars will not drag on for years and that the economic and security crisis will only be temporary. So it would be completely fair to come up with temporary measures to keep the state treasury in shape: a temporary national defense tax and a temporary crisis tax. Thereby, clear and definite criteria are necessary, how much money must be collected and under what conditions it will no longer be collected. The fulfillment of the Reform Party’s election promise, the elimination of the so-called tax hump, whose cost to the budget is 400 (!) million, must also be left out.
There is one additional possibility, which has begun to be more boldly considered, and for which the Ministry of Finance should be recognized instead of criticized. Namely, the offering of state bonds to Estonian people and companies. Considering that the August statistics of Eesti Pank showed the volume of time deposits of Estonian households and companies to be 5.3 billion euros (annual growth of 167%), it is not necessary to make modest forecasts, rather the opposite.
I have no doubt that many of those who have accumulated money will lend a helping hand to the state and invest in state bonds. But for this it is also necessary to honestly say what the money is needed for and how it will be used.
Car tax revenue for roads and new vehicle program
The use of tax revenue is another aspect of the planned car tax that annoys people. The condition of the roads is getting worse and worse, and the repair schedules are becoming less and less frequent, gravel roads need to be paved, the four-lane construction of the main highways cannot even be discussed under the current government. The road repair debt has grown to more than 4 billion euros, but most probably not a single penny from the car tax will reach this area.
This is how car owners are roped in several times: firstly, you pay when registering the vehicle (and according to the Ministry’s instructions, it must not be called a tax, but a fee!), secondly, you pay the annual vehicle tax, thirdly, you pay the fuel excise, but the maintenance of roads and the construction of safer roads remain an unanswered equation. The taxation of vans and its impact on (small) business still deserve a separate analysis.
If the finance minister were to confirm from the lectern of the parliament that even half of the euros collected from the car tax would be used for roads and a car exchange support program would be started, perhaps one could even begin to defend this idea of the tax. However, as long as this property tax program is a one-size-fits-all monster that is losing hundreds of millions to nowhere, it must be fought.
The car symbolizes freedom
Nothing can be helped, a personal car symbolizes freedom for many of us. The Soviet backwater, when car luck smiled only on the chosen ones, certainly has its share here, but not only. A car means more choices, flexibility, speed and, of course, comfort. It must also be understood that for many people, a personal car is the only means of getting around.
To understand the scope of the topic even better, it is worth remembering the month of August, when Estonia was threatened by a giant hailstorm. Car owners showed speed and creativity to protect their property. Some even went so far as to drive the machine’s wheels into the water so that it could fit under the bridge. So there is no reason to wonder why the car tax creates such a resonance in society.
Recently, in Southern Estonia, we could see what fiery emotions arose between kneecaps and belts precisely because of cars. Such things don’t just go away, as the modern proverb says: nori a man, but not a man’s Passat!
