The coalition agreement just signed by the Reform Party, Eesti 200 and the Social Democrats (SDE) will hit the Estonian middle class and rural areas the hardest, Isamaa chairman Helir-Valdor Seeder says.
An era of "tax peace" is over, while the election campaign of those parties now entering office turned out to be one mostly involving falsehoods, he adds.
"For decades, the Reform Party has considered the smallest possible tax burden as the cornerstone of its tax policy, while fighting for a cut in labor taxes," Seeder said Saturday.
"It has now abandoned its principles both in the area of income tax and in VAT. All this, despite the promises made to the voters," he went on.
Of the three coalition parties, only SDE spoke honestly about the tax increase plans, Seeder went on, though this was related to pledges to pay high salaries and distribute large subsidies via the additional money. However, these policies were not included in the coalition agreement, Seeder said.
"In their own messages, the coalition parties attribute their actions to the terrible [spring] economic forecast from the Ministry of Finance, which arrived unexpectedly. Down the years, these forecasts have tended to paint a more negative picture than is really the case, so the new assessment did not come as an actual surprise to the political parties continuing in government. Annely [Akkermann], the outgoing "squirrel" (the nickname for the Reform Party-ed.) minister of finance, accidentally blurted out this truth on her 'Esimene stuudio' appearance," the Isamaa leader added.
The current demographic crisis can only be exacerbated if additional tax-free income for children and spouses is abolished, Seeder added, in addition to the family allowances adopted near the end of the XIV Riigikogu's existence being jeopardized.
"It is worth remembering that, throughout its history, the Reform Party has always stood up for the wealthiest people in Estonia, meaning these changes will affect that group the least. However, everyone else, starting with the middle classes, will have to tighten their belts. The less you earn, the harder you will be hit," he continued.
Seeder said that the political parties making up the newly created coalition are also demonstrating in a particularly painfully way that, although they plan to create a regional ministry, they couldn't care less about regional politics.
"Rural areas of Estonia, where wages are already low and the only means of transport is a car, something which people cannot afford to replace, are crucial from the point of view of our national security. However, it is there that the planned tax increases will give the clearest signal that the government does not consider preserving life in the countryside a requirement," Seeder went on.
Editor: Andrew Whyte, Aleksander Krjukov