Estonia wants to require platform businesses to report workers to Tax Board

Bolt Food delivery person.
Bolt Food delivery person. Source: Siim Lõvi/ERR

Concerned about lost tax revenue on unreported income, the Ministry of Finance is introducing a bill that would require several platform businesses to report their workers and those workers' earnings to the Estonian Tax and Customs Board (MTA).

Bolt and Wolt delivery drivers, short-term rentals on Airbnb, handicrafts sold on Etsy — these all belong to a relatively new and unregulated area of which the state currently lacks an adequate overview.

People who earn money via various platforms often have to declare their own incomes and pay their own taxes as well.

"This platform economy has become incredibly popular today, and various countries have conducted analyses and reached the conclusion that maybe just one fifth of people earning money that way are declaring their data correctly," said Evelyn Liivamägi, deputy secretary general for financial and tax policy at the Ministry of Finance.

Hoping to get a better overview, the Ministry of Finance has submitted a bill that would obligate platform managers to report their workers and workers' earned income to the MTA.

"We estimate that what we know is actually just a small part of it, and considering how sparingly people have used the opportunity to voluntarily submit their data to their tax returns via platforms, then we have every reason to assume that the majority aren't so terribly motivated to pay taxes properly on income they've earned there" Liivamägi said.

That is what the new bill is designed to change. "For individuals, this will mean that income they have earned via this platform will be included on their pre-filled tax return," said MTA service manager Annika Oja.

According to platform managers, this was an anticipated change.

"For us, absolutely nothing will change, as we have reported all revenue lines to the Tax Board each month from the get go," said Wolt Baltic general manager Liis Ristal.

"We have paid taxes on courier services, thus ensuring social guarantees for our delivery people, including the Estonian Health Insurance Fund (EHIF)," Ristal explained. "Absolutely nothing will change for us. For us, this a very welcome directive that will ensure that everyone is treated equally, and that everyone will start reporting their income to the MTA on equal terms."

"If this is implemented uniformly throughout Europe and applies equally to all market participants, then I think it's positive that this will mean more transparency and likely more tax revenue going into the state budget as well," said Bolt cofounder Martin Villig.

"Of course, we ourselves are hoping that this will somehow also be treated as equivalent to those other fields where no such platform share exists, such as ordinary taxi companies, so that there would be equal treatment on the market of all service providers," he added.

Data collection is set to begin next year. Going forward, information will be required to be reported annually.


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Editor: Aili Vahtla

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