Ministry Calculates Cost of IRL's Tax-Free 500 Plan at €225 Million

Sven Sester (Postimees/Scanpix)
10/1/2014 9:47 AM
Category: Economy

The Ministry of Finance said IRL's idea to abolish all income tax for those earning 500 euros gross per month or less, would cost the state 225 million euros annually in lost tax revenue.

The calculations are double what the party itself published, and IRL MP Sven Sester has asked the ministry to show evidence the calculation behind the 225-million euro figure.

The ministry said it also took into account the pension system, as those pensioners earning more than the average currently pay income tax, but would under IRL's plan only do so after 500 euros.

The ministry also said a number of other expenses could increase their initial calculations, such as administrative costs, economic growth and lower unemployment rates.

Sester said he has asked for more specific calculations from the ministry.

IRL launched the idea a month ago, with critics saying it has too many progressive tax elements, something which the party has been against. The idea did give IRL a boost at the polls, increasing their popularity by 3 percentage points in the monthly EMOR poll.


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