Estonia estimates used car market to have EUR 18 mln tax hole


PHOTO: Urmas Luik / Pärnu Postimees

There's a tax shortfall of 18 million euros in the Estonian market of used cars, the Tax and Customs Board estimates.

The Consumer Protection Board, in cooperation with the Estonian Road Administration, the Tax and Customs Board and the Estonian Forensic Science Institute, made 19 test purchases in May and June, on the basis of which the consumer protection authority started nine misdemeanor procedures on the account of using unfair or misleading commercial practices, the institutions announced.

«In 26 percent of cases the real seller of a car wasn't revealed until the signing of a contract and in four cases the seller turned out to be a private individual. When buying from a private individual it is important to know that a consumer can only rely on the court for help. In 16 percent of cases the car didn't have the promised accessory equipment or it wasn't functioning,» the head of the Consumer Protection Board, Andres Sooniste, said.

The market for used cars will be under heightened supervision of the institutions from now on, director of the Tax and Customs Board Marek Helm said.

As a result of the test purchases the institutions have launched an audit of 12 companies that have a high risk of covering up revenues on a large scale and paying cash-in-hand, he added.

«We have inspected 120 natural persons who did not have official income or had it minimally but who had, in spite of that, listed 13 or more vehicles for pre-registration inspection -- altogether 3,271 vehicles for 120 persons,» Helm said.

As a result of the inspections corrections have been made to the income statements of several natural persons.

The institutions will carry out a joint publicity campaign and will subject car sellers to stepped-up checks.

«The Road Administration has made available the possibility to check the technical data and history of the vehicles in the Estonian motor vehicle register. We already have a great cooperation with the Estonian Car Dealers' and Service Companies' Association and we are working closely with all other parties on the market to reach our joint goals,» said the head of the Road Administration, Aivo Adamson.