The direct objective of taxes which are created to protect environment is to put individuals, institutions and companies to avoid or reduce the damages associated with the use of natural resources, releasing of pollutants into the environment and disposal. The analysis examines the receiving and using of the money from environmental taxes and other taxes connected to environmental use in the years 2005 to 2010.
„The money collected from environmental taxes has been for years the main source of funding environmental protection. A lot of different projects related to environmental protection are carried out thanks to this money.“ – Silja Kralik
Estonia received over € 436 million in environmental taxes was received in the years 2005 to 2010, almost half of it (€ 217 million) was from pollution tax, € 165.8 million or 38% was from various resource taxes and over € 53 million or 12.3% was the revenue from forests. Received environmental taxes were most affected by overall economy that influences the changes in the volume of environmental use and the rise of tax rates.
Some of the findings:
- The largest incomes from annual environmental taxes were in the years 2007 to 2009.
- The share of the state budget in the environmental expenditures decreased over the time, it was 80.5% in 2005 and 72.2% in 2010.
- The percentage of the environmental taxes in public finances is modest; it is less than 1.25% of total government revenue.
- In the budgets of local governments the environmental taxes accounted an average of less than 1.5%.
- Environmental taxes have been from 1.2% up to 1.5% of total tax revenue in different years.
- The largest share of the environment-related taxes has the fuel tax which was total of € 1.7 billion.
- Environment-related taxes made up 5-6% of the total revenue of government and state’s budget.
- € 38.7 was spent on environmental protection per capita in the years 2005 to 2010.
- In order to increase the effect of pollution taxes the chance to decrease pollutants and technological innovations should be monitored continuously.
- In order to get the better picture of the local governments’ environmental taxes and the use of money, the information about funding needs of the environmental expenditures should be collected.
- The impact of the tariffs on environmental protection and the efficiency of the use of the money from environmental taxes should be assessed more.
- Because the taxes are designed to increase resource efficiency, reduce pollution and move from labour taxation to taxation of environmental impact, the investments into environmental taxes and tax system should be made in near future in order to identify environmentally harmful subsidies.