The Riigikogu supported the proposal of the Chancellor of Justice to amend the Motor Vehicle Tax Act
Today, the Riigikogu decided to support the proposal of the Chancellor of Justice to bring the Motor Vehicle Tax Act and the Traffic Act into conformity with the Constitution, as they do not provide a possibility of not taxing the vehicles that have been destroyed or otherwise fallen into disuse in the course of the year.
According to the Chancellor of Justice Ülle Madise, the Motor Vehicle Tax Act and the Traffic Act are in conflict with the Constitution, as they lack provisions that would take into account the cases of property having been destroyed or otherwise fallen into disuse. According to her, the Traffic Act also lacks several important provisions regulating the administration of registration fees.
In her proposal to the Riigikogu, Madise explained that if a car was registered during the calendar year, the motor vehicle tax must be paid for the days remaining until the end of the year. However, according to her, if a motor vehicle is destroyed, for example, on the first day of the year, the tax will be collected for the entire year despite the fact that the taxable asset no longer exists. If a person buys a new car, they will have to pay the tax on both the property they no longer own and the property they do own. If the property does not actually exist (it has been destroyed or lost), there is no object of taxation. In the event a property is destroyed, the second part of the motor vehicle tax, i.e. the registration fee, is also non-refundable. However, according to the Chancellor of Justice, the registration fee is refunded if the motor vehicle is taken abroad.
“In both cases, it would be possible to avoid the taxation of destroyed property in practice as similar calculations are made while taxing a motor vehicle registered in the middle of the year and while taking a motor vehicle abroad,” said the Chancellor of Justice Ülle Madise in her presentation.
“Both while speaking in the Riigikogu committees and while explaining this proposal to the public at the request of journalists, I have also said that the Riigikogu enjoys a very broad decision-making space in terms of shaping the tax system. Only the members of the Riigikogu holding the mandate of the people can decide on what kind of tax system is fair and affordable for members of society,” said Madise.
Andrei Korobeinik from the Centre Party Group, Rene Kokk from the Estonian Conservative People’s Party Parliamentary Group, Urmas Reinsalu from Isamaa Parliamentary Group, Varro Vooglaid from the Estonian Conservative People’s Party Parliamentary Group, Peeter Ernits, Kalle Grünthal and Tanel Kiik took the floor during the debate.
68 members of the Riigikogu voted in favour of the proposal.
The President of the Riigikogu instructed the Finance Committee to initiate a Bill to bring the Motor Vehicle Tax Act and the Traffic into conformity with the Constitution.
Verbatim record of the sitting (in Estonian)
Video recording will be available on the Riigikogu YouTube channel.
Riigikogu Press Service
Maiki Vaikla
+372 631 6456, +372 5666 9508
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