Coalition parties not yet reached agreement on balancing budget

Coalition negotiations between Reform, SDE and Eesti 200 started at Stenbock House on March 8, 2023.
Coalition negotiations between Reform, SDE and Eesti 200 started at Stenbock House on March 8, 2023. Source: Ken Mürk/ERR

Reform, Eesti 200 and the Social Democratic Party (SDE) have not yet agreed on how to reduce the 750 million gap in Estonia's budget. Tax cuts and rises are being discussed.

Before the election, SDE highlighted the deficit and also called for a new tax to fund national defense. The party also wants to discuss new property taxes.

SDE vice-chairman Riina Sikkut told Friday's "Aktuaalne kaamera" (AK) that property and capital taxes in Estonia are "disproportionately small".

"There is a high level of wealth inequality in Estonia, which is growing year by year, and taxes are a way to increase fairness, to provide a better livelihood for people on low incomes and to shift the tax burden to the wealthier," she said.

Andres Sutt (Reform). Source: Ken Mürk/ERR

Reform and Eesti 200, while not ruling out discussions about new taxes in coalition negotiations, ultimately hope to get by without them.

Reform board member and former Minister of Entrepreneurship and IT Andres Sutt said big possibilities lie in reforms for the green economy, talent attraction and innovation.

"This will certainly help to raise the growth potential of the economy, and the forecasts at the moment do not take into account the higher growth potential of the economy. If we can get these reforms going quickly, then perhaps the need to cover the deficit will be less," he told AK.

Eesti 200's Marek Reinaas thinks new reforms are the way forward.

Marek Reinaas. Source: Ken Mürk/ERR

"It is possible to reduce public expenditure in such a way that public revenue and expenditure could be balanced even within the existing tax system," he said.

Taxes will be among the last topics discussed during negotiations, Prime Minister Kaja Kallas (Reform) said earlier this week.

Negotiations started on Wednesday.


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Editor: Mait Ots, Helen Wright

Source: Aktuaalne kaamera

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