Unemployment Insurance Fund board decides against tax increase
The supervisory board of the Unemployment Insurance Fund (Töötukassa) is to propose to the government that the unemployment insurance contribution rate remain at 2.4 percent for the next four years, with employees paying 1.6 percent and employers paying 0.8 percent.
Peep Peterson (SDE), who is both the chairman of the supervisory board of the Unemployment Insurance Fund and the Minister of Health and Labor, had previously proposed the tax increase, and stated that the board had analyzed the costs of previous crises, reviewed the costs of Unemployment Insurance Fund services and potential areas for cuts, and discussed an alternative of borrowing in the event of an unforeseen crisis.
"During today's deliberations, it was agreed to keep the present tax contribution rates," Peterson added.
With a contribution rate of 2.4 percent, unemployment insurance revenue in 2023 would equal €289.5 million, while expenditures would total €284.4 million.
The assets of the unemployment insurance fund are expected to grow by five million euros in 2023, taking into account all income and expenditures associated with unemployment insurance funds. The estimated net asset value by the end of 2023 will be €522 million. At the end of the previous year, the Unemployment Fund had a net asset value of €505.8 million.
Estonia introduced unemployment insurance In 2002. The highest contribution rate was 4.2 percent between 2009 and 2013, with the employee contributing 2.8 percent and the employer - 1.4 percent. Since 2015, the current unemployment insurance rate of 2.4 percent has been in effect.
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Editor: Kristina Kersa