Digital tax could be considered in Estonia

Andrei Korobeinik
Andrei Korobeinik Source: ERR

Introducing a digital tax in Estonia could be discussed in the future, policymakers of the Center Party said during a discussion of the party's tax package on Friday.

"Many international companies that are selling services in Estonia pay income tax in their country of domicile. That's what Facebook and Google do, for instance," MP Andrei Korobeinik said. 

Local taxes were also talked about during the discussion, along with an adjustment of existing taxes and excise duties. The idea of a tourism tax found support among participants in the meeting.  

The Center Party is about to come up with its package of tax proposals by spring 2020. 

Dignified life in one's old age was one of the central topics of the tax discussion. Social Affairs Minister Tanel Kiik observed that the amount of money equaling 0.4 percent of GDP that welfare services get in Estonia is regrettably low, being several times lower than the level for Nordic countries.

The solution, according to the minister, could be the introduction of a mandatory care insurance contribution that would help bridge the gap of €150 million between current funding and the necessary amount of money.

"Assets from the potential care insurance fund could be used for today's and future elderly as well as others who need it. The rate of the contribution, the mechanism for determining it and the specific arrangements are still subject to discussion," Kiik said, adding that also the use of occupational pension needs to expand significantly.

Prime Minister Juri Ratas, chairman of the party, emphasized that Estonia's new goal should be a societal balance that brings with it sustainable economic growth. 

"In the past couple of decades, we have been taking a rather one-sided look at tax matters in Estonian society and politics. In the years of transition, the sights were set on economic growth, which rapidly advanced our society's wealth. At the same time, many of our people and groups of society were left behind from that success. Therefore it is not surprising that we see in our society rifts which now need to be evened out," Ratas said. 

The debate on taxes will continue on Tuesday with a discussion on the future of the tax system in the Riigikogu, initiated by the Center Party as a matter of significant national importance. Presentations will be delivered before lawmakers by Dmitri Jegorov, deputy secretary general of the Ministry of Finance for customs and tax policy, and businessman Indrek Neivelt.


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Editor: Helen Wright

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