Finance Minister Maris Lauri said IRL's election promise of a 500-euro tax-free minimum is likely to be useless by the next parliamentary elections in 2019 as the minimum salary could reach 600 euros by then.
Laying into IRL's plans on her blog, Lauri said there is little point in complicating the Estonian tax system, which is clear, simple and easy to understand.
She said the average salary is very likely to hit 1,500 euros gross per month, a third more than right now, and minimum salary could be 500 or 600 euros, meaning no one will benefit from IRL's tax change idea. She said a higher tax-free minimum will also dissuade businesses from increasing salaries and Estonia will continue as a low-staff cost nation.
“The main aim of the Estonian economy is to increase productivity,” Lauri said, adding that the state should not stand in the way of higher salaries and more investments, and that the high-salary sectors, such as IT, are already complaining about high labor taxes, and a progressive tax system, as proposed by the Social Democrats and the Center Party would not keep successful people in Estonia.