Pensioners liable for income tax in 2020 nearly four times 2018 figure ({{contentCtrl.commentsTotal}})

Minister of Social Affairs Tanel Kiik (Centre).
Minister of Social Affairs Tanel Kiik (Centre). Source: Ken Mürk/ERR

Around 184,000 pensioners in Estonia, or 55 percent of the total, will be liable to income tax in 2020, Baltic News Service reports, compared with just over 31 per cent for 2019, and just under 15 percent in 2018, or nearly a fourfold increase in those three years.

The increase is partly a result of an extraordinary pensions hike initiated by the coalition government which will see pensions increase by €7 per month from April 1. At the same time, the government says that in 2018, amounts of income tax owed fell for over half of pensioners in the country.

In a letter to MP Signe Riisalo (Reform), Minister of Social Affairs Tanel Kiik (Centre) said 204,700 pensioners, or 61 percent of the total, will receive over €6,000, the tax-free threshold, in 2020 in pensions or a combination of pension and wages.

Pensions constitute income for taxation purposes. The tax-free threshold equates to €500 per month.

Had the extraordinary pension hike, a prime Centre Party election manifesto promise ahead of the March general election, not gone ahead, an estimated 174,000 pensioners would have been liable to income tax in 2020, with 196,000 pensioners seeing their pension or pension and remuneration for work combined exceeding €6,000 a year, according to BNS.

The same figures for 2019 are around 105,600 pensioners, or 31.5 percent of the total, liable for tax, with 137,300 receiving over the €6,000 threshold in pensions or pensions plus salary.

In 2018, 53,000 of pensioners, or 14.9 percent of the total, were liable to income tax, with 99,800, or just under 28 percent, bringing in over €6,000 in that year, BNS reports.

Kiik added that with amendments to income tax regulations at the beginning of 2018, 58 percent of pensioners had seen a reduction in income tax due for that year compared with the previous year, and 7 percent seeing a rise in income tax.

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Editor: Andrew Whyte

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