Car tax revenue has seen a significant decline, dropping by 22 percent in 2024 compared to the previous year.
As fewer people drive diesel vehicles, Finland is facing significant vehicle tax losses, with state revenue from this tax falling by about a fifth compared to the previous year.
In 2024, the state collected some 298 million euros in car taxes, which is around 84 million euros — or some 22 percent — less than in 2023, according to the Finnish Tax Administration.
This decline is due to a reduction in the number of taxable vehicles — no car tax is charged on new, fully electric passenger cars and vans.
The tax shortfall is a knock-on effect of previous governments' policies, with consumers reducing emissions by transitioning to cleaner vehicles.
Last year, the number of taxable vehicles also dropped by around 25,000 — or nearly 16 percent — compared to 2023.
In November 2024, the Ministry of Transport and Communications and the Ministry of Finance initiated a government-led project aimed at a comprehensive traffic taxation and financing reform. The finance ministry, led by Finns Party chair Riikka Purra, has said it is planning to increase the vehicle tax by some 35 million euros in 2026, mainly targeting EVs and plug-in hybrids.
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EDITED on 12 February at 12.55pm to add details about government plans to overhaul traffic taxation.
