Läänemets said putting together next year's state budget has been very difficult, but the need to raise taxes did not surprise SDE.

"The Social Democrats said before the last Riigikogu elections that these taxes would have to be raised somewhere if we were to increase public spending. We finally got where we needed to be. It was not a difficult place for us to reach because it did not offer any surprises. We had been talking about it in the coalition for years and finally we all got there," he told Thursday's "Esimene stuudio".

Läänemets stressed the agreed tax increases are a compromise and this does not mean that all parties in the government will like them.

Minister of Finance Jürgen Ligi (Reform) said it would be difficult to drop the defense tax after the 2028 Riigikogu elections. Läänemets agreed.

"Considering that the national budget in 2028, after the parliamentary elections, will have a very large deficit, and there will also be a €200 million shortfall in healthcare, I can confirm that it will not be possible to abolish today's taxes, at least not in part, to make such claims for the elections," he said.

"This is essentially the same outcome that Kaja Kallas admitted to before the elections. If you are now going to say that you are lowering taxes, it may not be the most appropriate approach. However, I acknowledge that taxes can be lowered, but they would have to be raised elsewhere. That isi part of the process. And I believe the Social Democrats will certainly enter the elections with the promise to lower taxes — for example, it makes sense to lower VAT and slightly increase the contribution from businesses to offset that," the interior minister added.

Asked if the defense tax is here to stay, Läänemets said: "Yes. For example, defence spending – in 2028, 2029, 2030, about €200 million to €300 million every year. If we cut taxes, how will it be possible to pay for it? And I would argue that it is not possible to make the Estonian state much thinner. It will come back as a cost. Everybody talks about a tax festival, but I think there was a bigger festival of cuts, at least it seemed to me at the government table."

The SDE chairman said his party's mission is to reduce social inequality, not raise taxes. "Taxes are, in part, a way of adjusting societal balance, and we all benefit from it, including businesses," he said.

Läänemets acknowledged that next year's state budget could be different, but hopefully, it will bring peace.

"The Social Democrats are not against cuts in principle, but the logic is that cuts will affect the ordinary Estonian the worst. We understand that the situation is difficult, compromises had to be made. In the Ministry of the Interior, too, some people already received layoff notices yesterday. But this is not the ideal Estonia," said the interior minister.

He said the so-called Robin Hood redistribution tax should help balance cuts to children's hobby education.

"The revenue base of municipalities will increase in the next few years, on average municipalities will receive between €500 000 and €800 000 more, so it will be possible to offset the impact that will occur. This has been done to ensure that children's leisure schools, small rural schools, libraries, etc. can continue to exist," Läänemets said.

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