Parliament passes the controversial tax change bill
Estonian Parliament on Monday passed the heavily criticized tax change bill, after a day-long debate.
The Cabinet decided to tie the bills to a vote of confidence against the government. The move took away filibustering option from the opposition. Had the Parliament rejected the bills, the government would have resigned.
The tax changes were supported by 58 MPs – all from the governing Reform Party, Social Democrats and IRL, effectively showing confidence in the government. 41 MPs from the Center Party, Free Party and Conservative People's Party (EKRE) voted against.
Last week, the Center Party handed over 27,000 anti-tax-rise signatures to the Parliament. The party proposed 97 amendments to the bill, which included, among other tax changes, the planned 10 percent hike in fuel tax each year for three years. EKRE submitted 91 and the Free Party 11 amendments. The Free Party proposed increasing tax on alcohol faster than planned and a few other changes instead.
The tax rate shuffle package includes decreasing social tax from 33 percent to 32.5 in 2017 and to 32 percent in 2018. The tax-free minimum will increase to 205 euros per month by 2019. Tax on accommodation businesses will increase from 9 percent to 14 percent in 2017. Duty on alcohol and tobacco will increase by 15, not 10 percent as initially planned. Tax on fuel will increase by 10 percent each year for three years from 2016, among other changes.