"The principle behind the temporary broad-based security tax is to cover Estonia's increased security expenses in a way that ensures everyone contributes, as security concerns affect everyone equally. It is the job of the minister of finance and the Ministry of Finance to prepare the calculations for public sector cuts and to implement the necessary temporary security tax to cover these security costs," Michal told ERR.

"Budgetary choices, analyses and economic forecasts are presented to the government by the minister of finance, and the government makes decisions. This kind of discussion is worth considering before making a decision. Various bases for implementing the corporate portion of the security tax have been proposed. The Ministry of Finance will calculate these options, and the minister will present all relevant choices to the government, which will then make the final decision," he said.

"The discussion is about options for implementing the coalition agreement, not about opening it," the prime minister stressed.

The state's plan to make cuts and introduce a new temporary broad-based defense tax will come into effect in the autumn, he said. "This creates predictability and certainty for growth. Political forces can ask for the next mandate in the 2027 parliamentary elections for any new ideas of tax or large loans for the Estonian people," said Michal.

The three-year defense tax has been created from rises to VAT, income and company profit taxes.

Minister of Finance Jürgen Ligi (Reform) said in an interview with ERR on Friday last week that he is considering an additional 2 percent taxation of all salaries of company employees instead of advance corporate tax on company profits.

The minister said this would be easier to collect and would not increase the burden on companies.

Lauri Läänemets, chairman of the Social Democratic Party (SDE) and Reform's coalition partner, criticized Ligi's plan on Monday.

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