The government is due to issue bills today, Wednesday, to impose a tax on sweetened beverages, to hike penalty rates and also to freeze the income tax-free threshold with regard to pensions.

SDE chair and Interior Minister Lauri Läänemets says however that these bills can find support from his party only if Reform supports the redistribution plan, referred to as a "Robin Hood" tax.

Speaking to ETV news show "Aktuaalne kaamera" (AK) Tuesday, Minister Võrklaev noted his incomprehension at this move, saying: "The interior minister has himself expressed a desire to raise the penalty rates; SDE's health minister (Riina Sikkut – ed.) the tax on sugary drinks. Plus we've also agreed on this same local government funding reform. I have asked the Minister for Regional Affairs (Madis Kallas, SDE – ed.) multiple times when the intention to develop will be forthcoming; when we will be able to proceed with this reform in substance, but unfortunately so far it is in the works, but these decisions have not been taken." 

"[SDE] don't stand behind the Reform Party," Võrklaev went on.

In December, Madis Kallas, the minister for the regions, came up with a plan to cut the income base of wealthier municipalities and redistribute more funds to less well-heeled rural municipalities and towns, particularly those with a greater population of pensioners.

Reform rejected this plan in January, but now SDE is ostensibly opposing plans (ie. the sugary drinks tax and the other pending bills) it had hitherto supported.

In addition to the state budget issues, the sugary drinks tax is also a matter of public health, Võrklaev went on.

He said: "The health minister is dealing with the tax on sweetened beverages, and there is also a health dimension here. Naturally, the impact on the state budget [also exists], totaling €25 million. Inasmuch as I have heard regarding figures, a bottle of lemonade will cost around 20 cents more; in other words I certainly think our children and young people will be influenced towards making healthier choices, plus of course the impact on the state budget will also be a positive one."

As for hiking misdemeanor fines, the finance minister said that while there is no escaping taxes, there is in the case of fines, provided an individual behaves in a law-abiding manner.

"The interior minister has also been strongly convinced that the current tariff of fines is outdated, given the standard of living has risen [since it was drawn up]," Võrklaev added. He was unable to specify how much the penalty rates would rise by, however, as this is a matter for the justice ministry, and for the interior ministry (ie. Läänemets ministry in the latter case)."

"Unfortunately, we have to look at the state budget. If we have to bear coercive costs, such as those of defense or of teachers' salaries or of investing money into cybersecurity, then those funds have to come from somewhere, and that's what the diverse tax measures are there for. To take for example fines – well you don't have to commit misdemeanors; in that case you won't be fined, plus I think that compliance with the law is a high virtue and is a necessity," the finance minister added.

The bills to be presented by the Reform-SDE-Eesti 200 coalition on Wednesday follow a meeting at the Stenbock House on Tuesday. As standard, they will need to pass a Riigikogu vote before being enshrined into law.

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