"As soon as we learned about the plan to reintroduce corporate income tax for businesses, both the Employers' Confederation and the Chamber of Commerce and Industry began discussing and working on finding any possible alternatives. The proposal we presented was one such alternative, fully aware that in tax matters, there is no solution that will make everyone happy," Kai Realo told ERR.

"We have made general calculations, although our data may not be as precise as what the state has access to, so the ministry will definitely need to conduct its own calculations," Realo added.

"Our logic was based on two points. First, we see that there are currently political parties that want to reinstate corporate income tax in Estonia. Although it's currently planned as a temporary measure, there is a risk that future coalitions and governments might make it permanent and even increase it. This would send a very negative signal for Estonian businesses and their competitiveness," she said.

According to Realo, the alternative proposed by Ligi would involve more companies. "It would not only affect those making a profit but also companies operating in less profitable sectors that still contribute to employment by having employees. In a way, it broadens the range of businesses that would pay this tax," Realo said.

"We see that broader participation in this tax is reasonable. This would include employees registered in the employee register, including those working under various other contracts, such as contracts for services," Realo added.

"We believe that implementing such a tax would also be less bureaucratic, with very clear costs. In contrast, an advance corporate income tax involves a lot of bureaucracy," he continued.

"How would it be calculated? How would it be paid? How would refunds be handled? The state would need to hire more officials, and businesses would have to adopt new principles. Therefore, we find that this tax would involve significantly less bureaucracy," Realo concluded.

On Friday, Finance Minister Jürgen Ligi (Reform) mentioned in an interview with ERR that he is considering a 2 percent additional tax on all employee wages as an alternative to an advance corporate income tax. According to Ligi, this tax would be easier to collect and less burdensome for businesses.

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