Simson: Raising tax exempt minimum would be ‘insanely expensive’ ({{commentsTotal}})

Minister of Economic Affairs and Infrastructure Kadri Simson (Center). Source: (Siim Lõvi/ERR)

According to the chairman of Center’s parliamentary group, Kadri Simson, raising the amount of income exempt from income tax to €500 would me “insanely expensive, but not entirely impossible”.

On the other hand, such a step would guarantee that someone making the minimum salary gets their full wage, and is more motivated to work, Simson said. The change would mean an additional €60 per month. “This would be insanely expensive, but not entirely impossible,” she added.

The Center Party, the Social Democrats, and IRL are currently in the process of negotiating a new coalition. In her interview with daily Eesti Päevaleht published on Monday, Simson said that they were considering raising the tax-free minimum, but that major tax policy shifts wouldn’t happen before 2018.

About the current government bill by the outgoing Reform Party government, Simson said that the new coalition wouldn’t take it over as it is.

“We won’t put a budget into practice in 2017 that was put together following the priorities of the Reform Party,” Simson said. “But any changes have to be of the kind that don’t worsen budget balance. The balance of expenditure and revenue has to be maintained. The current negotiations take bigger change into account for 2018 and onwards,” she added.

According to Simson, those who have gained the most from the slight income tax reductions so far have been those with an average to large monthly income. Whatever the state lost in revenue this way was taken back by raising excise duties.

Currently those with low incomes paid a disproportionally high amount of tax, and the most important objective of the new coalition would be to find solutions how to reduce their tax burden, Simson said. Changes couldn’t be made in a way that everybody would win and nobody would lose, but all three negotiating parties were aware that none of them would be able to push their entire party platform through.

The new coalition was in favor of borrowing money, though not in excess of €100m, Simson said. Investors from abroad were looking for a good infrastructure and workforce, so this would be where the money would need to be invested.

Editor: Editor: Dario Cavegn

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