Estonia, EU – Baltic States, Labour Unions, Legislation, Markets and Companies

Harri Taliga.

The trade union leaders convened on Tuesday in order to discuss two decisions that were adopted in Riigikogu last week – on lowering income tax and abolishing land tax on land property that is under homes. The first of which was stated to be directly in opposition to the European Commission’s positions and the second is not in line with recommendations from OECD to Estonia.

In the beginning of June, the European Commission recommended Estonia to first and foremost lower the tax burden for people with low and medium-sized incomes and to decrease social taxes so that the budgetary revenue would not decline.

“If the income tax for all people is to fall uniformly, by one per cent, employees earning high wages would gain the most from this move while revenue to the State budget would fall significantly,” noted the chairman of the Estonian Confederation of Trade Unions Harri Taliga. He pointed out that the subsistence of low-income citizens will not improve due to that step while they would suffer from the decline in the volume of social services that are financed from tax revenue.

In April, OECD recommended that Estonia increase the share of taxes on property and among the recommended measures was to consolidate the cost of taxable land with market prices and to establish real estate tax on buildings as well.

“If our decision-makers ignore authoritative international recommendations due to their political priorities, it appears that there was no sense to join OECD,” said Taliga. “This organisation shares with us their recommendations on the basis of neutral expertise in comparison to other developed countries, aiming to help Estonia solve its social and economic problems,” he added.