Estonia 200: Reform's tax exemption idea like reheated soup

Marek Reinaas (Estonia 200).
Marek Reinaas (Estonia 200). Source: Anna Aurelia Minev/ERR

The opposition Reform Party's proposal to introduce a €500 income tax exemption for all in lieu of the current income tax system is an old one and doesn't solve Estonia's future problems, Marek Reinaas told ERR on behalf of the nonparliamentary Estonia 200.

"It's like reheated soup, or like a Brezhnev joke whose punchline everyone knows and the environment in which it is told has also long been forgotten," Reinaas said. "In other words, we have heard this idea from the Reform Party for at least five or six years already. So there isn't anything terribly innovative about it."

He said that he is even disappointed in the Reform Party, considering how many good financial and economic experts are among its ranks; he considered the initiative to be subpar.

"And first and foremost because it isn't very clear exactly what problem they're trying to solve," the Estonia 200 member said. "On the contrary, I think that changing the minimum tax exemption for individuals one way or another, or nudging it a few notches one way or another will not solve Estonia's future problems. This particular proposal certainly drew attention, as there are enough good and capable specialists in the Reform Party that could come up with something great, but this idea, which has been circling around Estonia for quite some time already, is definitely not what is worthy of undue attention."

Individual income taxes certainly aren't what will bring the Republic of Estonia good fortune, Reinaas found. "The primary concern here is that the Reform Party's proposal benefits wealthier people, and nothing at all will change for those who can't get by as well themselves," he said. "Which will contribute nothing to Estonia's solidarity. Rather, I think that the only thing this will contribute to is a several-hundred-million-euro hole in Estonia's state budget, which will have to be patched up one way or another, or some expenditures will have to be canceled, which likely isn't reasonable.

"Naturally as a right-wing party we are against implementing new taxes, but I think when it comes to individual income taxes, then let the current system be," he continued. "There is no evidence that anyone is very worked up or upset by it, or that it causes any problems. So I think there's no reason to fix what essentially isn't broken."

Asked what he thought of a progressive income tax scheme, the Estonia 200 representative replied that he believed there is no reason to change or touch the current progressive tax income scheme as it currently exists in reality in Estonia. "Let it be — if it works, then that is very well," he said.

"If we were to star talking about how to solve future problems facing Estonia, which are connected to the environment and other global changes, then they aren't tied to individual income taxes; these are different solutions altogether," Reinaas said, adding that getting into them wouldn't be possible in the format of a brief interview.

The opposition Reform Party is submitting a bill on Wednesday according to which everyone, regardless of the size of their annual income, would be granted an income tax exemption of €500 per month (€6,000 annually), beyond which income would be subject to a flat rate of 20 percent.


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Editor: Aili Vahtla

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