Car tax revenues likely to fall short of revised €90 million figure
Weak car sales may mean the Ministry of Finance's projected motor vehicle tax revenues will only be partly met by year-end.
The ministry in summer reduced its original forecast, but this revised figure is not likely to be met either, based on current data.
The Ministry of Finance, when it drew up the car tax bill, estimated the 2025 car tax registration fees would bring in €137 million. The tax came into effect at the start of 2025.
As of summer, however, it was clear that this €137 million would not be reached; the ministry revised its estimate downwards to €90 million, as part of its summer economic forecast.
As of now, it is apparent this reduced sum will not be attained either. "It's unlikely that €90 million in registration fees will be collected this year," said Risto Kaarna, lead analyst at the Ministry of Finance's fiscal policy department.
This was in part the result of a fall in vehicle imports amid uncertainty about whether the car tax is here to stay, Kaarna went on.
"In summer it seemed that the import and purchase of new vehicles, particularly by companies, was almost back to its previous levels. In recent months, however, vehicle imports have again fallen into a slump, probably in part due to political talk about abolishing the motor vehicle tax," he added.
Kaarna noted assumptions behind the €90 million in the summer forecast were locked in at the start of August, based on data available for the first seven months of the year and ahead of the slump.
Another factor, Kaarna said, was the two percentage point VAT hike, to 24 percent, that came in at the start of July.
As of the end of September, €48.9 million had been collected in motor vehicle registration fees. Based on an average monthly collection of €6.25 million from May to September, and if sales remain stable, the total registration fee revenue by year's end would reach about €68 million by year-end. This is around half the original Ministry of Finance forecast and a quarter less than the revised summer forecast.
As of September 2025, a total of 58,709 vehicles subject to registration fees had been bought in Estonia this year.
The ministry is planning a more detailed analysis of the car tax next spring, Kaarna said, in addition to the ministry's spring and summer forecasts.
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Editor: Hujo Aaspõllu, Andrew Whyte
