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European Commission Recommends Car Tax For Estonia

By Ulrika Lomas,, Brussels

04 June 2013

Estonia has again dismissed a recommendation from the European Commission that the country should introduce a car tax and/or higher excise duties on motor fuels, as an environmental incentive to improve energy efficiency.

Instead, according the Finance Ministry, the government intends to remain focused on existing measures, such as an electric car programme. When the EC recommended a vehicle tax last year, Finance Minister Jürgen Ligi told the media that the government did not want to put extra burdens on car owners, and that to do so would be "regionally painful."

The EC's recommendation was published in a document responding to Estonia's 2013 stability programme for the period 2012-17 and the country's 2013 national reform programme. It forms one of five country specific recommendations (CSRs) in relation to the EC's Europe 2020 strategy for growth and jobs.

The EC notes that Estonia has made some progress in meeting CSRs for 2012, in particular by limiting the budget deficit to 0.3 percent of GDP, but that some reforms efforts "appear insufficient." As well as introducing the tax, the EC recommends implementing the structural budget balance rule in the Treaty on Stability, Coordination and Governance, complemented by more binding expenditure targets; better-targeted labor market policies; making education and training more relevant to the labor market; and local government reform to ensure that the whole population has access to services such as child care, family support services, healthcare, education, and transport.

TAGS: environment | tax | European Commission | vehicle tax | Estonia | environmental tax | excise duty | ministry of finance | European Union (EU) | Europe

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