Political parties try to woo voters with tax cut promises

A purse with coins and cards.
A purse with coins and cards. Source: Karin Koppel/ ERR

Political parties are promising tax cuts in their manifestos in the run-up to the March 5 election. But several parties also propose to introduce a graduated income tax.

On Tuesday, "Aktuaalne kaamera" compared tax promises from parties trying to win seats in the Riigikogu.

The Center Party believes the current tax system has outlived its usefulness. Former Minister of Public Administration Jaak Aab said it would be European to introduce a graduated tax system, also known as a progressive tax system.

"The minimum wage could be tax-free. For example, this year it is €725, and the tax exemption could rise in line with the increase in the minimum wage. In addition to this, a graduated income tax, where the part of the average salary that exceeds this, not the whole part, is taxed at 20 percent. The part that exceeds this could be taxed at 30 percent," said Aab.

The Greens and Social Democratic Party (SDE) are also calling for a similar reform.

Jevgeni Ossinovski (SDE). Source: Ken Mürk/ERR

"Within the tax system in general, it is no surprise to anyone that SDE supports a progressive approach. This means that the contribution burden for lower-income earners could be lower and the tax burden for higher-income earners could be higher. Consequently, we have always argued for an increase in the tax-free minimum income," SDE board member Jevgeni Ossinovski told AK.

In general, parties do not want to raise taxes. But the Center Party would like to tax large corporations, SDE would create local taxes and the Greens want to see more environmental taxes.

There are also plenty of plans to lower taxes.

Isamaa is calling for income tax reform.

"The income tax reform actually means a reduction in the tax burden for families with children, i.e. €5,000 per child per year would be exempt from income tax," said Isamaa chairman Helir-Valdor Seeder.

Helir-Valdor Seeder. Source: Siim Lõvi/ERR

EKRE wants to reduce taxes, especially excise duty.

"Estonia is not a low-tax country, no matter what the left-wing parties say. In fact, the tax burden in Estonia is quite high. Given the price rises we have had, we simply must come to the aid of people and businesses. Given what actually works for economic recovery, tax cuts are the best way to get to the point where, in the future, in two or three years' time, our budget receipts will be better," said EKRE chairman Martin Helme, a former finance minister.

Reform is striving to balance the budget and stands by the current tax system, which it argues is the most competitive.

Eesti 200 wants lower labor taxes.

Parempoolsed says that new taxes will not be introduced.

The Greens want more penalties for hazardous substances and heir production, and imported goods would have additional carbon taxes. 


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Editor: Helen Wright

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