President asked not to proclaim tax changes law
The Estonian Chamber of Commerce and Industry and the Central Union of Estonian Property Owners have appealed to the President of Estonia to refuse to proclaim the newly passed tax package law.
The Chamber of Commerce and Industry found that the new law violates the principle of the Taxation Act that any changes to taxes should be notified of at least six months in advance. The property owners union likewise found that the curtailing of the opportunity to deduct mortgage interest violates the principle of reasonable expectation. The president has until Jan. 2 to reach a decision, reported ETV news broadcast "Aktuaalne kaamera."
According to Director General of the Chamber of Commerce and Industry Mait Palts, there is a great deal of positive in the new tax changes, however they cannot agree with their entry into force without the requisite six months’ notice. Should the president nonetheless decide to proclaim the tax changes, Palts intends to contact the Chancellor of Justice.
"I can’t rule out the possibility that at some point the Supreme Court will need to handle this matter, and perhaps in this case the law must be changed as well in order for this issue to be more precise," said Palts.
Chairman of Krimelte and Wolf Group Jaan Puusaag, however, considered the tax changes to be positive and found that lowering the social tax for half a year before increasing it again would be pointless.
"On the one hand, business-owners have long fought for changes to law and taxes coming with at least six months’ notice," Puusaag noted. "It’s as though this agreement was finally reached with the previous government and now the new government has turned it on its head. On the other hand, I have not come across a business-owner who would say that this tax bundle is bad."
The Central Union of Estonian Property Owners found that the reduction of the maximum mortgage interest deduction from 1,200 to 300 euros would the principle of reasonable expectation.
Union chairman Priidu Pärna stated that the state can make such changes if they deem them necessary and the objectives sought with the incentive are achieved. "But this cannot be applied to mortgage contracts which are already signed," he continued, noting that it could only apply to future loans.