Instead of burdening entrepreneurs with tax increases and reducing the livelihood of the elderly and low-paid people, the VAT increase of the Reform Party-led government must be canceled and the VAT on books, foodstuffs, restaurant and catering services, medicines and accommodation must be reduced to 5 percent, say Jaak Aab and Kersti Sarapuu, members of the Finance Committee of the Riigikogu.
“Today’s government wants to bring with it unprecedented tax increases, about which not a word was said before the elections,” says Jaak Aab. “The increase in sales tax raises prices in all areas of life and affects the daily life of low-income people in particular. The Center Party has organized pickets and a demonstration against tax increases, and we stand up for our principles in the Riigikogu as well.”
According to Jaak Aabi, the faction of the Center Party will submit five amendments to the VAT law going into the second reading, the main of which is the cancellation of the 10 percent VAT increase. “The reform party wants to sharply increase the VAT for accommodation facilities, our position is that it should be reduced to five percent in light of the planned tourism tax,” said Jaak Aab. “We also consider that in the current conditions of rapid inflation, in addition to the extension of the temporary reduction in the excise duty increase for special-purpose diesel fuel, it is also reasonable to extend the discount rate of the diesel fuel excise duty for the years 2024-2027.”
Kersti Sarapuu emphasized that lowering the VAT on foodstuffs, restaurant and catering services and medicines to 5 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 food products. Most countries have reduced VAT to 0-15 percent. Food makes up a very large part of the budget of an average family, more than 20 percent of expenses are spent on it,” said Kersti Sarapuu. “We also consider it important to lower the VAT on medicines, because elderly people have to spend a significant part of their pensions on buying medicines. Buying food or medicine must not be on the scales.”
