"At today's cabinet meeting, we agreed that starting this year, a car tax discount will apply to families with children — €100 for each minor child up to age 19," Prime Minister Kristen Michal (Reform) said at a press conference following the session.

"If both parents have a car, each parent will be able to deduct €50 from their car tax per child. If only one parent owns a car, then €100 will be deducted per child," Michal added.

According to the prime minister, the Ministry of Finance will work out the full details of the tax plan over the summer so that the draft legislation can be submitted to the Riigikogu in September and, ideally, passed in October, allowing the discount to be applied by the end of the year.

"Another equally important principle is the reassessment of vehicles in categories M and N. This means that annual taxes on buses and minibuses, which have been higher, will be recalculated at a lower rate. This will benefit those who use minibuses for transport — including people with disabilities, as well as local governments, sports schools and others. This measure will also be included in the same bill," Michal continued.

The prime minister said the cabinet also agreed that revenue from the annual car tax — initially estimated at €99 million per year, though reduced by the discounts — will be allocated to road construction.

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