Prime minister calls for review of 'tax dogmas'

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Prime Minister Kaja Kallas in a Vikerraadio studio. Source: Priit Mürk/ERR

Estonia should subject the existing tax dogmas, meaning what we tax at present and what we wish to tax and how, to a review, Prime Minister Kaja Kallas said on a radio program of public broadcaster ERR on Tuesday.

Kallas (Reform) said that while we tax working highly, working has changed a lot.

"We all want people to have a job and a living. On the other hand, property is not taxed in that way and we should look at that balance. Digital taxation needs to be looked at in the light of the new OECD agreements. We also need to look at excise duties, or what we want to encourage and what we don't," Kallas said on the "Stuudios on peaminister" program of Vikerraadio station.

Kallas added that she does not want to come up with an idea for a specific tax that would come or go away, but with a comprehensive solution that would also show how it will affect a person's wallet. 

The head of government said that although the Estonian economy grew by 5.4 percent in the first quarter, she does not think that the €60 million worth of budget cuts should be abandoned. She cited the opinion of the Fiscal Council, which has said that the country should save more on costs at a time when the economy is growing and there is a risk of overheating.

"What I say on this news [GDP growth - ed] is that we are not going to review fiscal policy. A lot of money has to go to address the concerns of health care workers," Kallas said, specifically referring to resolving the problem of wage rises for nurses and the purchase of new vaccines.

SDE-initiated debate on link between austerity, poverty to take place Thursday

A discussion of the impact of austerity policy on Estonia's development and the wellbeing of residents, initiated by the opposition Social Democratic Party (SDE), will take place in the Riigikogu as a discussion of a matter of significant national importance on Thursday. 

The debate titled "Inequality in Estonia -- can poverty be overcome with cuts?" will start with presentations by Madis Aben, an economic analyst, Mari-Liis Sepper, project manager at the Praxis think tank, Andres Roigas, researcher of creative industry, and MP Riina Sikkut.

"One of the consequences of the Reform Party's long period in power was rising income inequality and peripherization. In the aftermath of the previous crisis, Estonia became one of the most unequal countries in the European Union," Sikkut said according to spokespeople for SDE. 

"We are in a new crisis, and the government, led by the Reform Party, is once again imposing cuts and the ideology of thin state on the society. Decimal places in the budget position and the debt  burden are more important than the coping of those who are weaker and the promises made by the state in the past. There's plenty of subject for parliamentary debate," Sikkut added. 

The former minister of health and labor said there is reason to ask whether there are alternatives to cuts.

"Inequality doesn't go away by itself, but will get worse in times of crisis. To reduce poverty and inequalities, we need to take decisions that even out the differences. We need to build a stronger society that has more solidarity," Sikkut said.

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Editor: Helen Wright

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