Two-party Reform-Eesti 200 government to eliminate corporate income tax

The Reform Party and Eesti 200's forthcoming two-party government coalition plans to eliminate the taxation of corporate profits, scrap personal income tax starting from the first euro as well as cut the number of officials by 20 percent.
Speaking at a press conference on Monday afternoon, Prime Minister and Reform Party chair Kristen Michal said that the government's goal is to move further to the right on the political spectrum.
"At a time when swift decisions are necessary, we cannot endlessly revisit those decisions, review them and deliberate over them," Michal said. "Certain decisions need to be made for Estonia's sake, and then once done, we need to move forward."
The prime minister noted that he would present the resignations of four ministers to President Alar Karis on Tuesday.
The planned new government coalition's two parties currently hold 52 seats in the 101-seat Riigikogu.
Foreign Minister Margus Tsahkna, representing Eesti 200, added that discussions regarding support have already taken place with unaffiliated MPs, i.e. those who do not currently belong to any parliamentary group.
Michal emphasized that the new government's focus will primarily be on improving the economic environment and ensuring security.
"The first thing will be to eliminate various tax hikes in the economic sector, starting with the taxation of business profits," he said. "Businesses need to be able to grow, especially now that the longer economic downturn is over and the economy has started warming up."
The Reform chief added that this message will help businesses better plan their activities.
"This is what we've agreed upon between partners in its initial format," he said. "We will, of course, draw up the relevant draft, which will be certain to be approved, and then we'll take it to parliament."
Sunset clause for some voting rights
According to Michal, the anticipated new coalition is also planning to reduce individuals' tax burdens as well.
"Starting next year, income should have started being taxed beginning from the first euro, but we're changing that too," he confirmed. "Income tax will remain at 24 percent, but it won't start from the first euro; it will follow the same principles as before."
Such an agreement, he added, could not have been reached with the Social Democrats (SDE).
The prime minister noted that defense spending is planned to be raised to 5 percent GDP, based primarily on the military advice of the commander of the Estonian Defense Forces (EDF).
Regarding the constitutional amendment regarding the voting rights of Russian and Belarusian citizens in Estonia's local government elections, Michal said that they will be moving forward with a so-called sunset clause, meaning that while Russian and Belarusian citizens will still be able to vote in this year's local elections, they will no longer have the right to vote after that.
"This could have the support of four parties and unaffiliated MPs," he highlighted. "I hope that the Social Democratic Party doesn't intend to maintain its opposing position either."

According to the Reform leader, the processing of the skilled labor bill had been stalled by the Social Democrats. Now, however, the plan is to move forward with it.
Michal noted that the new government coalition would focus on how to better utilize natural resources for the benefit of the economy, as well as how to simplify environmental restrictions.
"This means fewer restrictions, allowing people to better handle their affairs," he explained. "Businesses as well. Boundaries would be more precise, and between state and local government restrictions, protected areas would not exceed 30 percent."
This is one of the first bills the new coalition would bring to the government, he added.
The plan is also to move forward with nuclear energy. "In the coming months, we expect proposals from the Ministry of Economic Affairs and Communications and the Ministry of Climate for the initiation of a special plan," the prime minister confirmed.
Tsahkna: We can't allow such political games
According to Michal, the role of the Government Office can be reduced by 20 percent in terms of the number of officials.
"This is quite the ambitious goal, but we're aiming to set our sights high," he said. "Even partial success would already mean significant relief in the Estonian state's bureaucracy and administrative processes."
Both Michal and Tsahkna stated that SDE chair Lauri Läänemets has repeatedly suggested that Eesti 200 could be ousted from the government.
"We are moving forward with clear decisions, without the Social Democrats," Tsahkna stated.
"We simply cannot allow for such political games in a situation like this," he continued. "The government has been incapable of making major decisions lately — in energy, on regulatory issues — and there are many other topics that have been stalled largely due to political games happening behind the scenes. Eesti 200's goal is to create a clearer, leaner government."
Michal confirmed that the plan is to draw up a new coalition agreement, and noted that the duties of the ministers being dismissed will be taken over by interim officials in accordance with their lines of succession.
"When we draw up a new coalition agreement, that's where we will determine whether some ministerial positions will be merged or whether certain areas of responsibility will be shifted," the prime minister said. "Some changes in certain areas are likely."
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Editor: Aili Vahtla