Government to postpone removing 'tax hump', Pevkur continues as defense minister

The government will push back the removal of the income tax-free threshold, known as the 'tax hump', by one year, Minister of Defense Hanno Pevkur (Reform) said on Friday. He also confirmed he would continue in his role in the new coalition.
On Thursday evening, Reform, SDE, and Eesti 200 negotiators received the coalition agreement text. It will now be discussed among the parties' boards.
The Reform Party's board will meet on Friday at 10 a.m. to officially discuss and confirm the agreement, Pevkur told "Vikerhommik."
But he said Minister of Finance Mart Võrklaev will not continue in post and confirmed SDE will get one more ministerial position.

Pevkur highlighted postponing the removal of the "tax hump" by one year, paying extra attention to stockpiling ammunition, reducing bureaucracy, and speeding up planning processes.
"Let's make it our goal that security and the economy, the issues where it hurts the most, will be the focus," he explained. "Foreign investors and the business environment need certainty. If you can't get the economy going, there's no point talking about better budget revenues."
It is also known that ministries need to reduce their costs by 10 percent over the next three years.
Removing the "tax hump" in 2025 was a Reform Party manifesto pledge at the last election which was written into the coalition agreement last year. Estimates suggest it will cost the state around €500 million a year in lost revenue.
Kiik: Ministers confirmed by SDE board on Sunday

Tanel Kiik, SDE deputy chairman and member of the negotiating delegation, told "Vikerhommik" that pensions and indexation were key issues for the party.
Kiik said a tax increase of approximately €500-600 million per year has been laid out in the coalition agreement.
The former minister of health and social affairs ruled out becoming a minister in the next government. "The time when I will be a member of the government again may come, but it will not come now," Kiik said.
SDE's ministers will be confirmed by the board on Sunday, he added.
The SDE and Reform Party councils will meet on Friday at 2 p.m. to approve the coalition agreement. Eesti 200 will meet on Saturday morning.
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Editor: Helen Wright