The Center Party faction of the Riigikogu did not support the increase of turnover and income tax in the first reading, because they serve the interests of the wealthiest people and worsen the livelihood of the low-paid and the elderly the most, said Jaak Aab and Kersti Sarapuu, members of the finance committee.
“The Reform Party did not say a word about tax increases before the election, and therefore they do not have the mandate to implement it. Raising sales tax and income tax by 10 percent is simply cynical in a situation where Estonia remains at the top of the inflation table,” criticized Jaak Aab. “The government’s income tax reform takes money from poorer people and gives it to richer people. All this is done to cover the 500 million Reform Party’s election promise, with which people wealthier than the average are given 700 euros of tax-free income every month. A big question mark is the impact of tax increases on the economy, because no serious analysis has been done. A separate question is why Estonia 200 and the socialists support tax increases that have such a negative impact on Estonian people, entrepreneurs and the economy. After all, getting into the government is more important than worldview.”
Kersti Sarapuu according to him, in a situation where the European Commission is predicting economic recession only for Estonia and Sweden this year, it is necessary to focus on investments instead of cuts and tax increases. “Currently, it would be a good opportunity to build ready four-lane highways and build rental houses in rural areas,” said Kersti Sarapuu. “Instead, free public transport will be abolished and the construction of Tallinn Hospital will be abandoned. Raising local taxes is also not the way out, because they make up a negligible part of the total budget. Only a stranger can prepare such a tax package.”
Jaak Aab and Kersti Sarapuu are of the opinion that instead of tax increases, a classic graduated income tax should be introduced and the VAT on food should be lowered, which increases the cohesion of society. “It is time to move to the European tax system, where the tax burden depends on a person’s income. Considering that Estonia is one of the countries with the fastest price growth in Europe, every extra euro is helpful for people,” explained the deputies elected from Järva and Viljandi County. “The annual price increase of foodstuffs continues to be very fast. The price increase affects all basic foodstuffs, and therefore lowering the VAT on foodstuffs to five percent is an essential step for the livelihood of Estonian people and companies. Estonia is one of the four member states of the European Union that does not apply a reduced VAT rate to foodstuffs.”
