Plans to scrap extra tax for mothers who give birth at "wrong time of year" ({{contentCtrl.commentsTotal}})

A mother on parental leave at home with her young child. Estonia has one of the most generous parental leave systems in the world.
A mother on parental leave at home with her young child. Estonia has one of the most generous parental leave systems in the world. Source: (Peeter Langovits/Postimees/Scanpix)

Minister of Finance Martin Helme has given instructions to solve a technicality that has made women whose maternity leave starts in the final months of the year pay a higher amount of income tax compared with other expecting mothers, Postimees reported.

"A clear instruction has come from the minister of finance to solve the situation, and we are preparing a legislative amendment in that regard. The specific solution can be talked about when the draft legislation is ready," spokesperson for the Ministry of Finance Siiri Suutre said.

Suutre could not say when exactly the draft would be ready, but made it clear the matter was urgent.

"As the end of the year is nearing, our wish is to have it ready as soon as possible," she added.

Postimees has on repeated occasions reported about a flaw in the Income Tax Act which places a bigger tax obligation on women whose maternity leave starts at the end of the year.

The shortfall in legislation has the sharpest impact on expecting mothers whose monthly gross wage is between €900 and €1,500 and who go on maternity leave in October, November, or December.

The problem is related to the fact that the 4.7 months of maternity benefit is paid in advance, and its landing in the expecting mother's bank account in the final months of the year will technically push the woman in a higher income bracket.

The amount that a woman may lose as a result of giving birth at the "wrong" time of the year can be as high as €783. 

After an article published in Postimees, chairman of the Riigikogu finance committee Aivar Kokk made a proposal to change the Income Tax Act. Where the finance committee's proposal was for the amendment to take effect from 2021, the wish of the ministry to have the bill completed still before the end of the year gives hope that the situation may improve already for women about to give birth at the end of this year, Postimees said. 

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Editor: Helen Wright

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