President wants greater resolve from government, suggests open tax debate (3)

President Toomas Hendrik Ilves (Mihkel Maripuu/Postimees/Scanpix)
BNS
2/22/2016 2:59 PM
Category: Politics

In an interview with Päevaleht, President Toomas Hendrik Ilves said that Estonia needed a government that actually governed the country. He also accused the government of being unwilling to take part in a wider debate about the country's tax system.

“I don’t see a coalition in the current Riigikogu other than the Reform Party, the Social Democrats and IRL. But the parties shouldn’t take this as inevitable, but as a possibility to bring Estonia forward. Now we’re at a relative standstill. So let’s not talk about fixing the government, but about how the people there should change their attitude.”

The government should begin by talking to each other, and working out positions and agreeing on them together, the President said, not one of its members suddenly announce, “Let’s ban burqas.”

Ilves also said the government was hiding its lack of resolve behind arguments over unimportant topics. At present, the government's work was overshadowed by the weak cooperation within the ruling coalition, and its arguing over relatively small things, which had to be solved quickly to be able to move on with the bigger topics, he went on to say. "The seat of a European Union accountant or, borrowing from English, a bean counter in Luxembourg is not something that one should be going over and over again for months.”

The same applied to implementation of the Registered Partnership Act, Ilves said. "As a matter of fact, Estonia, all of Europe faces very big problems – be it speeding up the economy, or solidarity and the refugee crisis. Yet we are living just like in a bubble," he said.

The President also suggested that the government should conduct a review of the country's tax system. “In my opinion it isn’t only a Reformist, Centrist or Social Democratic tax policy, or whatever partisan tax policy for that matter, that will take us forward. What helps is a tax environment that favors development in the Estonian economy. One shouldn't be afraid of raising that topic. Potential changes shouldn't be seen as someone's political defeat," he said.

“What’s the terrible thing that could happen if we started a serious discussion about tax reform? Nothing. Things could only get better. Our wages have almost doubled in the past ten years, yet the tax environment is the same," the President said.

"Does tax stagnation deepen the stagnation of the economy? Let's discuss this calmly. Should we introduce a property tax and reduce labor taxes, because in taxing labor costs we are taxing costs, not earnings? Should we introduce corporate income tax? Should we adhere to the principle that we tax wealth, not one's aspiration to become wealthy? Should we introduce regional tax incentives? Should we raise the tax-exempt income?” Ilves pointed out that no businessman would invest in a hopeless situation, and that with the lack of investment, the economy wouldn’t develop either.

If the government lowered labor taxes, this would send a sign to entrepreneurs that it was trying to improve the business environment, Ilves said. This, in turn, would increase entrepreneurs’ security and serve as an incentive for investment.

The government was unwilling to be part of a debate about taxes despite the fact that people were coming up with ideas how to improve the system. Ilves said that while he couldn’t say that there was a lack of ideas, there was no response. “A debate requires at least two sides,” the President said.

Editor: Dario Cavegn

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