The Minister of Finance replied to the interpellation concerning the elimination of the tapering of the personal allowance, and the increase of taxes

In their interpellation (No. 78), Members of the Riigikogu Kersti Sarapuu, Ester Karuse and Maria Jufereva-Skuratovski pointed out that people earning a salary of under 1200 euro and less and pensioners would not gain much from the elimination of the tapering of the personal allowance and the increase in the personal allowance. At the same time, people’s incomes would decrease due to an increase in VAT, income tax and excise duties, the car tax, the rising price of the shopping basket, and decreasing family allowances.

The Minister of Finance admitted that money came into the state budget from tax revenue, and a state could not be maintained only by lowering taxes and paying benefits. “With the elimination of the tapering of the personal allowance, labour taxes will fall, and people will have more disposable income,” Võrklaev said. He added that, with an increase in the personal allowance, subsistence benefits and pensions, people with lower incomes would have more disposable income. “However, the country must get tax revenue from somewhere.”

Võrklaev underlined that public finances were in a bad state, and the state budget needed additional funds due to additional expenditure, such as an increase in defence expenditure. “We cannot lower taxes and put the state budget in order at the same time,” he emphasised. Pointing out the VAT increase, the raising of excise duties, and the motor vehicle tax, Võrklaev said that those were additional taxes in the case of which it was possible for people to choose whether to opt for a smaller or a bigger car and how much and what to consume. “In fact, all in all, richer people pay more VAT because they consume more, and more expensive products.”

The Minister pointed out that, together with the elimination of the tapering of the personal allowance, from 2025, the personal allowance would also be raised from 654 euro to 700 euro, and the personal allowance for pensioners would be raised from 700 euro to 776 euro. “Pensioners have lower incomes, and they also have different tax benefits,” Võrklaev said.

The Minister of Finance also replied to the interpellations concerning the lack of impact analyses in the minister’s policy sector (No. 19), the Corporate Sustainability Reporting Directive (No. 52), the VAT for accommodation providers (No. 63), the VAT on foodstuffs (No. 76), the increase of VAT (No. 101), the establishment of a car tax (No. 118), the state budget deficit (No. 121), and the integral impact of the tax package (No. 140), submitted by Members of the Riigikogu.

The Minister of Economic Affairs and Information Technology Tiit Riisalo replied to the interpellations concerning the increase of the VAT for accommodation providers (No. 69), the impact of inflation on the area of administration of the ministry managed by the minister (No. 137), and the impact of the green transition on the area of administration of the ministry managed by the minister (No. 138), submitted by Members of the Riigikogu.

The Minister of Climate Kristen Michal replied to the interpellations concerning investments in the transport sector (No. 11), the establishment of a nuclear power station (No. 21), the use of mineral resources (No. 20), the renovation of apartment buildings in Ida-Viru County (No. 55), the environmental impact of mandatory renovation of buildings and people’s ability to pay (No. 123), and the integral impact of the tax package (No. 141).

According to an agreement between interpellators and ministers, the interpellations concerning deceitful policy (No. 80 and No. 89) were excluded from the agenda for the sitting. The interpellation concerning the implementation of the forestry development plan (No. 28) which the interpellators withdrew was also excluded from the agenda.

The sitting ended at 10.25 p.m.

Verbatim record of the sitting (in Estonian)

Video recording will be available to watch later on the Riigikogu YouTube channel.

Riigikogu Press Service
Merilin Kruuse
+372 631 6592; +372 510 6179
merilin.kruuse@riigikogu.ee
Questions: press@riigikogu.ee

Link uudisele: The Minister of Finance replied to the interpellation concerning the elimination of the tapering of the personal allowance, and the increase of taxes

Source: Parliament of Estonia