The European Commission has raised concerns over Estonia's planned car tax, citing its discriminatory nature against owners of vehicles purchased from other EU member states.

This assessment, reminiscent of a precedent set in Romania nearly a decade ago, focuses on the registration fee component of the proposed tax, as reported by ETV news show "Aktuaalne kaamera" (AK) on Wednesday.

The Ministry of Finance is now tasked with deciding whether to amend the bill, which has passed its first reading in the Riigikogu (Estonian parliament), or to contest the matter with the European Commission. Annely Akkerman, a Reform Party MP and Chair of the Riigikogu Finance Committee, noted that the Commission's evaluation was less severe than expected, indicating a degree of flexibility regarding the imposition of a registration fee.

Referring to the Romanian case, where the European Commission and the European Court of Justice required the state to reimburse incorrectly collected vehicle taxes, Akkerman highlighted the significance of this precedent. The committee anticipates proposals from the Ministry of Finance by the end of the month to amend the car tax bill accordingly.

Finance Minister Mart Võrklaev emphasized that the initial draft included options to apply the registration tax universally, to both domestic and imported vehicles. However, feedback prompted reconsideration, particularly concerning the treatment of vehicles within Estonia versus those from outside the country. Võrklaev underscored the importance of balancing environmental objectives with fiscal considerations in shaping the car tax policy.

The proposed car tax, slated to take effect in 2025, comprises two components: an annual tax for all vehicle owners and a registration fee for cars imported into Estonia. It is the latter component that the European Commission has deemed discriminatory. The tax was initially outlined in the coalition agreement signed by the Reform-SDE-Eesti 200 government nearly a year ago, facing hurdles in its implementation due to widespread opposition.