Parties all want simpler income tax, disagree on revenue sources ({{commentsTotal}})

Remo Holsmer.
Remo Holsmer. Source: (Siim Lõvi /ERR)

Though the parties all support a simplification of the current income tax scheme, they disagree on how to keep up the state's revenue. While the Reform Party is in favor of granting everyone a tax-free income of €6,000 a year without changing the tax rate, the Social Democrats in this case might want to increase it.

Reform Party MP Remo Holsmer said on ERR's Vikerraadio on Thursday that the income tax system needs to be made simpler again. The currently unfair treatment of working pensioners and receivers of parent benefits needs to be addressed as well, Holsmer said.

As Reform see it, the tax-free income could be set at €500 a month, or €6,000 a year. Though the party's chairman, Hanno Pevkur, said at the end of last year that he could imagine raising consumption taxes or even the income tax rate, his party wouldn't support anything of the kind.

"He is a chairman on the way out," Holsmer said about Pevkur. "It's pretty clear that we won't support an income tax increase." Instead, the party would get additional money out of "fostering entrepreneurship" as well as the privatization of companies currently still belonging to the state.

According to Social Democratic MP Kalvi Kõva, his party would support €500 a month in tax-free income for everyone, but would want to increase the income tax rate in such a case. "So that Holsmer doesn't get €100 cash every month," Kõva said.

The Social Democrats might also include turning the current land tax into a real estate tax in the sense that the Reform Party's honorary chairman, Siim Kallas, recently suggested it.

Holsmer pointed out that Kallas had suggested taking the step to increase the income base of local councils, and that the Reform Party on the whole doesn't support the idea.

Kõva stressed in turn that raising the value-added tax rate was out of the question. Making food more expensive wasn't a viable way out, he suggested.

Participating in the discussion for the Pro Patria and Res Publica Union (IRL), former Minister of Finance Sven Sester only commented that his party certainly won't support the introduction of a progressive income tax. Regarding tax policy, it is IRL's goal to lower labor taxes: transfering the financial burden from taxing labor to consumption is acceptable, Sester said.

Editor: Dario Cavegn



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