The Minister of Finance Sven Sester replied to the interpellation concerning the rise in tax burden (No. 289), submitted by members of the Riigikogu Aivar Sõerd, Arto Aas, Urve Tiidus, Maris Lauri, Taavi Rõivas, Kristen Michal, Hanno Pevkur, Kalle Palling, Remo Holsmer, Toomas Kivimägi, Keit Pentus-Rosimannus, Jüri Jaanson, Eerik-Niiles Kross, Lauri Luik, Deniss Boroditš, Ants Laaneots, Johannes Kert, Jürgen Ligi, Anne Sulling, Igor Gräzin, Madis Milling, Laine Randjärv, Yoko Alender and Meelis Mälberg on 9 January 2017.
The interpellators referred to the press briefing at the end of last year where the list of major economic indicators distributed to journalists had stated that tax burden would rise by 0.6 percentage points to 35 per cent of GDP in 2017. The interpellators wished to know if the new state budget strategy also provided for a rising of the tax burden in 2018 and the following years.
Sester explained that the new state budget strategy for 2018–2021 is based on the spring forecast of 2017 of the Ministry of Finance due in April. “Thus unfortunately it is still early to say what the tax burden will be according to the new forecast. Namely, the tax burden depends not only on the tax rate, but also on actual tax revenues as well as the expected amount of gross domestic product, because it is the quotient of these two numbers,” Sester said. He added that if we look at the tax measures adopted and planned by the new Government, then for example the lower tax rate on distribution on profit for mature enterprises which is planned to yield larger tax revenue in the first years of application eventually turns out to be a tax lowering. It motivates undertakings to distribute more profit, despite the fact that, in the first years, it brings greater additional revenue to the budget and, statistically, a consequent rise in the tax burden.
Sester noted that major measures that affected the tax burden of 2016 and 2017 were postponement of alcohol and fuel excise duty rise to February, additional raising of alcohol excise – beer, cider, wine –, cancellation of the diesel duty rise for 2018, abandonment of the lowering of social tax, abandonment of the rise in VAT on accommodation services, and shifting residual dividends of 2016 to December.
Sester pointed out the following indicators: the tax burden will be 35 per cent in 2017; 35.8 in 2018; and 35.6 in 2019, and will fall to 35.2 per cent by 2020. At the same time, the effective labour tax rate will be 34.3 per cent in 2017; 33.9 in 2018; 34.1 in 2019 and 34.2 in 2020.
The replies to the interpellation and the discussion that followed during the debate sparked an emotional discussion on issues related to the circumstances of the tax burden.
Sester also replied to the interpellation concerning Tamme Arvo’s shop in Tsooru (No. 291) and the interpellation concerning the state budget expenditure related to Rail Baltic (No. 301).
The Minister of Education and Research Mailis Reps replied to the interpellation concerning the education in Estonian in schools where Russian is the language of instruction (No. 286).
During the open microphone, Mart Helme took the floor.
The sitting ended at 7.35 p.m.
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