The plan of the Government of the Republic to combine several important tax changes into one cluster bill and give it to the Riigikogu for processing as a matter of urgency shows an arrogant attitude and is in sharp contrast to good practice, says Tanel Kiik, chairman of the Riigikogu’s Center Party faction.
“Increasing sales tax and income tax by 10 percent and abolishing the VAT distinction for accommodation have such a wide-ranging effect that every change requires a thorough discussion and analysis. Such a rolling policy is a clear signal that the government led by the Reform Party has no will to hold a substantive discussion and involve the parties,” he says. Tanel Kiik. “It is rumored that the tax increases went through the coordination round in just a few days – in such a short period of time it is not possible to do any content analysis or assess the accompanying effects.”
According to Tanel Kiige, the decision of the Union of Estonian Towns and Municipalities to leave the tax changes uncoordinated is also significant, as the explanatory letters have not analyzed or outlined their impact on local government budgets.
“The Minister of Economy and Information Technology responsible for tourism also admitted in the interview of “Esimes studio” that the impact of the VAT increase on accommodation facilities on tourism and the Estonian economy in general has not been sufficiently assessed. The faction of the Center Party recently met with the representatives of the Estonian Hotel and Restaurant Association and other tourism associations, and their message was the same – the abolition of the VAT distinction will significantly worsen the competitiveness of the sector and neighboring countries will benefit from it. The mayor of Riga has not hidden his anticipation.”
The Center Party does not support the planned tax increases, because they serve the interests of the wealthiest people and worsen the livelihood of low-paid and elderly people the most, notes Tanel Kiik. “Furthermore, the plan to cut benefits for rich families with children, which was recently raised in the previous composition of the Riigikogu with the participation of the Reform Party, is significant. It divides society, reduces the sense of security of families and creates more uncertainty about the future in an already difficult time,” states the vice-chairman of the Center Party.
