The Ministry of Economic Affairs and Communications (MKM) is developing a legislative amendment that would impose a so-called regulatory fee on telecommunications companies, which would be used to fund services provided by the Consumer Protection and Technical Regulatory Authority (TTJA). According to the draft, the regulatory fee would amount to 0.2 percent of the company's revenue from telecommunications services.

In its response to the legislative intent document (VTK), the Ministry of Finance stated that it does not find the proposed solution appropriate and, therefore, does not approve of the plan.

The Ministry of Finance noted that while the VTK refers to services provided by TTJA to businesses, it does not clarify what specific business-related services TTJA provides to these companies. "Covering the costs of providing services to businesses for their commercial interests through a regulatory fee is unfair to those companies that do not order services from TTJA. If a service is provided at the initiative of and for the benefit of the business, a state fee should be established for it," the Ministry of Finance argued.

Additionally, the VTK does not indicate that the telecommunications company paying the fee would receive any specific service or benefit in return. "Such a fee has the characteristics of a tax, and as such, it could represent the introduction of a new tax on telecommunications companies. Moreover, if the purpose of the regulatory fee is also to fund an increase in the number of state officials (with 12 additional officials gradually added by 2028), this cannot be considered right or justified," the ministry noted.

The Ministry of Finance pointed out that TTJA is a government agency funded by the state budget and that business activities, including generating income, are not among TTJA's primary responsibilities. "State supervision is a core function of the state as outlined in the Constitution, and it is funded by the state budget. Therefore, additional needs should be covered by the state budget," the ministry's response stated.

Furthermore, the ministry believes that the payment of a supervisory fee would weaken TTJA's independence as a telecommunications regulator.

"Charging a fee for its actions from the person under supervision creates a negative incentive for TTJA, meaning more supervision leads to more revenue. This contradicts good governance practices. The state should only intervene in a person's activities in extreme cases; the intervention should be minimally burdensome, and the agency should act efficiently," the ministry wrote.

The Ministry of Finance also warned that introducing a new fee could lead to additional costs, potentially necessitating the hiring of more employees.

Regarding radio frequency licenses, the Ministry of Finance noted that if the current fees no longer cover TTJA's costs, it would be more appropriate to consider raising the existing fees rather than introducing a new indirect tax. "To evaluate the introduction of new fees, all existing fees and charges should be analyzed, and, if necessary, adjusted to ensure they are justified, transparent, and proportionate," the ministry said.

Telecoms have also slammed the plan. Doris Põld, CEO of the Estonian Association of Information Technology and Telecommunications (ITL) said, "At a time when the government has publicly promised to focus on reducing public sector expenses and bureaucracy – commitments also reflected in the coalition agreement – an astonishing plan has been made to increase the number of TTJA officials dealing with the telecommunications sector by 44 percent. ITL urges the government to fulfill the promises of the new coalition agreement in practice and to stop all activities that increase bureaucracy, administrative burdens on companies, the state's cost base and the number of officials in Estonia."

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