The objective of the study represented today was to identify the possible solutions for the taxation of road transport in Estonia that would not unreasonably impair the competitiveness of the country as a living and business environment, and are economically and technologically feasible. The concept of examining the options for the implementation of road user charges has been laid down in the action programme of the Government in order to initiate the discussion over transportation charges.
Future transport policy of the European Union provides for the harmonisation of the road transport taxation arrangements in the Member States. Apart from Finland, Estonia is the only Member State of the European Union, which has not established road user charges for heavy goods vehicles in accordance with the directive of the European Union.
The analysis enables Estonia to better defend its positions in shaping charges for transport during the European Union’s policy consultations.
The following three solutions were observed on the basis of the experience of ten foreign countries: the annual fee of passenger cars, the time-based road user charges for heavy goods vehicles, and the mileage-based road user charges for heavy goods vehicles.
Although it was found that passenger car taxation would ensure the largest tax return, the people who conducted the study estimate that it would also limit the opportunities for mobility of people living in rural areas. The establishment of such tax would require the introduction of compensatory measures.
Upon the implementation of the time-based and mileage-based road user charges for heavy goods vehicles, it is recommended to prefer time-based charging, which would also apply to foreign carriers using the road network of Estonia.
From the perspective of the economic impact of transport taxes, the study indicates that it is important how the tax revenues are reinvested in the economy.
Among transport taxes, Estonia has implemented only fuel excise duty and register-based heavy goods vehicle tax compulsory to all Member States of the European Union. The latter has been established at its minimum rate allowed in the European Union.
The study was carried out by Ernst & Young Baltic AS and it was commissioned by the Government Office in cooperation with the Ministry of Economic Affairs and Communications and the Ministry of Finance with the support of the European Social Fund.
More information: Henry Kattago, Deputy Strategy Director of the Government Office, +372 693 5629, [email protected]