Minister: Farmers do not want their property taxed
From the perspective of farmers, taxing businesses' assets would not be fair, said Minister of Regional and Agricultural Affairs Piret Hartman (SDE), commenting on the ongoing debate in which a potential defense tax is being discussed. Possible options under consideration include either an asset tax or a profit tax for businesses.
"Neither option is ideal, but we have no other choice if we want to protect our country. In making this decision, I stand against taxing businesses' assets, as it would impose a disproportionate burden on farmers," said Hartman in a written comment to ERR.
According to her, agriculture is an asset-intensive sector, but it plays an irreplaceable role in ensuring food security.
"Everyone must contribute to security, but at the same time, it is important to give both taxpayers and businesses a clear indication that the state is collecting taxes fairly. Burdening agricultural businesses with an asset tax would clearly disrupt that balance," the minister said.
Hartman explained that farmers have a large amount of equity but relatively low turnover. The assets of agricultural businesses are mostly based on loans, and Estonian farmers carry one of the highest debt burdens in the country.
"If we start taxing farmers' land, animals and inventories, it will only amplify the unfairness, because even every bale of silage fed to cattle counts as an asset on the farmer's balance sheet," Hartman pointed out.
In the minister's opinion, agricultural businesses in a growth phase or those that have recently made investments would be particularly hard hit by a capital tax.
She also highlighted that farmers' primary production resource is land, and with the recent changes to the Land Tax Act, land taxes have already increased significantly in some areas. "This means that an additional asset tax would clearly result in double taxation," Hartman said.
The minister emphasized that agricultural producers and rural businesses are also part of Estonia's security, including food security, providing a stable backbone for the country.
"For example, Finland has decided, even amid current austerity measures, that agriculture is the only sector they will not cut because it is strategically important. Agricultural businesses don't need assistance in a crisis; they provide it – with alternative heating sources, generators, fuel reserves, self-produced food and production capacity. We must ensure their sustainability," Hartman said.
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Editor: Mait Ots, Marcus Turovski
