Taxes concerning income, VAT, excise duties on alcohol, fuel, and to tobacco, among others, have been amended by the coalition.

A tax-free minimum of €700 a month — €8,400 a year — will be introduced, regardless of income.

Over the next three years, alcohol excise duty will increase by 5 percent per year. The Ministry of Finance said a moderate increase in excise duty will not increase cross-border trade with Latvia, which has lower alcohol taxes. The last time the excise duty on alcohol was raised was in 2018.

As a result, five cents will be added to wine, one cent to beer and cider, and 19 centers to vodka in 2024, the government said in a statement.

Duty on cigarettes and smoking tobacco rose by 5 percent in recent years and will continue to do so for the next three years. The same increase will apply to tobacco liquids, such as vapes.

Gambling taxes will also rise in the coming years. The current 5 percent tax on online gambling and sweepstakes will be raised in two stages: to 6 percent in 2024 and to 7 percent in 2026. 

Sales tax will rise to 22 percent from 2024, and the following year the 9 percent VAT discount rate applied to accommodation will be abolished.

From 2025, the personal and corporate income tax rate will rise to 22 percent. Additionally, the 14 percent preferential rate on regularly distributed profits will disappear.

The government also plans to introduce a new car tax in the future.

Several taxes will be abolished, such as using tax-free income for child and spousal support and deducting housing loan interest from taxable income.

The bill must now be passed by the Rigiikogu.

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