"It is necessary to apply both incentives to encourage a switchover to less polluting vehicles and a certain registration tax to encourage (owners) to sell their polluting car. I think such a sandwich could work," he told the Ziniu Radijas radio station on Tuesday.
The minister noted that Lithuania currently has one of the most polluting car fleets in the EU.
"If we fail to renew our vehicle fleets, emission allowances will cost us hundreds of millions (of euros) additionally in the next decade," he said.
International organizations have recommended for years that Lithuania introduce a tax on polluting vehicles and broaden the property tax base.
Last year, the government moved to tax an individual's second and further residential properties at a rate of 0.3 percent, but the Seimas did not back the proposal.