"I would like to clarify a few statements about the defense budget that I find misleading and give the impression that tax increases, cuts, and other budgetary issues are only caused by the increase in defense spending," Herem wrote on social media.

"This week, Minister Võrklaev said on Kuku radio: " ... last summer, in the new government, we made austerity decisions for €840 million over the next four years and we also made tax decisions and at the same time we increased our defense spending very strongly." It is true that defense spending has been increased, and I am very grateful for that, but it is misleading to say that it has only now been increased vigorously under this government and that it is defense spending that has led to the need for tax increases," Herem continued.

The general said that even before the 2023 elections, during the 2023-2026 state budget strategy, there were plans to increase defense spending to 2.8 percent of GDP. Additionally, before the election, the Riigikogu had agreed to raise defense spending to 3 percent of GDP.

"This year's budget deficit is at least €1.2 billion, but the defense budget has risen by €200 million, or one-sixth of this amount," said Herem.

"The Minister said more: " ... we increased defense spending by about half a billion, we did not do it again just on the basis that we are going to borrow and see what happens the day after tomorrow. But we made the tax changes to cover it." It's true that compared to 2022, the defense budget has increased by even more than half a billion, €557 million in fact, and again, I'm very grateful for that and these have been very brave decisions. But it is misleading to say that the loan and the tax changes are only needed because of defense spending," the general stressed.

"At the same time, there was high inflation in Estonia and the budget rose from €11.7 billion to €18.1 billion, or €6.4 billion. The increase in defense spending accounts for 8.6 percent of this. That is less than a tenth. 5.8 billion has also been spent on other needs. I think it would be appropriate to talk about these as well when explaining the deficit," Herem added.

The government is planning to introduce taxes on vehicles and sugar in the coming years, and the flat rate of income tax will rise to 22 percent from 20 percent next year.

At the same time, the "tax hump" will be removed next year – a Reform party manifesto pledge – which will cost the state approximately €500 million.

Last month, the OECD recommended Estonia raise tax revenues. The junior coalition party has suggested introducing a progressive income tax, which has been rejected by Reform and Eesti 200.

Kallas: We have had to raise taxes due to the increase in defense costs

Speaking at the Lennart Meri Conference on Saturday, Prime Minister Kaja Kallas (Reform) said raising taxes to increase defense spending is difficult and unpopular.

"We [Estonia] are spending 3.2 percent of GDP on defense. That has required us to raise taxes. I can tell you, that is not popular. It is not popular and all the parties who said during the election that we have to spend at least 3 percent for defense are not supporting raising taxes. I'm the only soldier on the battlefield in this regard. And this is hard. It is very, very hard," Kallas said, when asked how much countries should spend on defense.

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