On Thursday, members of the Riigikogu supported Chancellor of Justice Ülle Madise’s proposal to bring the Motor Vehicle Tax Act and the Traffic Act into compliance with the Constitution. According to the Chancellor of Justice, these laws are unconstitutional because they lack provisions that take into account the destruction of property or other cases in which a vehicle is no longer in use.
In the Riigikogu, Ülle Madise stated:
"The motor vehicle tax consists of two parts: a registration fee and an annual tax. If a car is registered during the calendar year, the tax must be paid for the remaining days of that year. In this case, day-based calculation is possible, and the state seeks to collect additional tax. However, if the vehicle is destroyed on the first day of the year, for example due to a fire caused by a firework accident, the full year’s tax is still collected—even though the taxable property no longer exists. If the person can afford to buy a new car, they are required to pay tax for both the property they no longer own and the one they currently have. In both cases, taxing the destroyed property could be avoided in practice, because similar calculations are made when registering a vehicle mid-year or exporting it abroad. I believe this kind of situation violates the Constitution."
The Chancellor explained that only the Riigikogu, as the body with a public mandate, can determine what constitutes a fair and affordable tax system. There is no universal rule for assessing the fairness or developmental benefit of a tax system. "Such judgments depend on one's worldview—and certainly also on interests. Therefore, the constitutionality of taxes can be reviewed only in a limited way. The Supreme Court, once again, has confirmed that the Riigikogu has broad discretion in shaping the tax system. However, this discretion is not without limits: property rights, the special significance of home, valuing large families, supporting people with disabilities, and other constitutional provisions must be taken into account. And whether they are taken into account can be reviewed through constitutional supervision. This is a normal part of state functioning," said the Chancellor of Justice.
"And given that the Riigikogu has assigned the Chancellor of Justice the task of promoting the rights of children, families with children, and people with disabilities, I added to the official constitutional review proposal—regarding taxation of non-existent property—a note requesting reconsideration of exemptions for large families and people with disabilities. For example, such exemptions are possible in Finland, and for many reasons, Estonian car owners are also familiar with the Finnish system."
68 members of the Riigikogu voted in favour of the Chancellor of Justice’s proposal.
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