Finance minister: New tax hikes needed in the coming years

Mart Võrklaev.
Mart Võrklaev. Source: Jürgen Randma / Government Office

Minister of Finance Mart Võrklaev (Reform) said that if Estonia wants to fix its state budget and pay for future spending, additional tax hikes will be needed in the next few years. But the minister did not wish to say which taxes may be increased and by how much.

"It is clear that if our goal is a tidy budget and the ability to pay for future spending, and in a situation where our obligations outstrip our revenue and the tax base is set to fall, we need to agree on and come out with additional tax hikes in the near future. But what will it be exactly, how will it look is a matter of public debate," Võrklaev told the "Terevisioon" morning show Monday.

He added that the additional tax hike does not need to happen in 2024.

"But we could use 2024 to have the debate. We have been forced to take on many unavoidable obligations. We have discussed defense spending which we aim to cover with this spring's tax hikes. We also need to concentrate on internal security. We need to concentrate on Estonian education, cybersecurity and maintaining IT systems. These are the expenses we're looking at and need to cover," Võrklaev said.

Prime Minister Kaja Kallas also told ERR on Saturday that there is an alternative source of revenue, while she declined to go into more detail.

The coalition Social Democrats have proposed a special tax for soaring profits in banking and discussed returning to a corporate tax system as ways out of the situation. Võrklaev does not support these ideas and finds that additionally taxing a single sector as a "working campaign" would have broader repercussions.


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Editor: Urmet Kook, Marcus Turovski

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