Estonian officials call for fuel tax and VAT reductions

Political figures and industry representatives in Estonia are calling for a reduction in fuel excise duties and Value Added Tax (VAT) to alleviate the economic burden on citizens and businesses caused by rising fuel prices.

Mihhail Kõlvart has advocated for lowering both taxes, noting that fuel prices have exceeded 2 euros per liter and that the energy crisis is a long-term condition rather than a temporary anomaly. He suggests that the state could compensate for these changes by adjusting the tax structure to stabilize prices.

Simmo Saar, chairman of the Estonian Automobile Owners Association, has specifically proposed reducing the VAT on motor fuel from 24 percent to 13 percent. He argues that because VAT is a percentage of the total price, consumers currently pay significantly more per liter as fuel prices rise. Saar suggests this could be implemented as a temporary crisis measure, potentially lasting until the end of 2026, to support consumer income and economic stability.