The Riigikogu passed eight Acts

The Act on Amendments to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act and the Act on Amendments to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act and Other Acts (145 SE), initiated by the Government, raises the excise duty rates on alcohol and tobacco products in order to increase excise revenue and to influence the accessibility of alcohol and tobacco products.

The alcohol excise duty, which was last raised in 2018, will rise by five per cent per year in 2024–2026. The excise duty on cigarettes and smoking tobacco, which has been raised by five per cent per year in recent years, will rise to the same extent in 2024–2026. The excise duty on tobacco liquids will also increase by five per cent per year over the next three years, and the minimum amount of excise duty paid will grow to the same extent in the case of cigars and cigarillos.

In the case of cigars and cigarillos, the Acts establishes the accuracy intervals of the maximum retail price in order to reduce the range of prices and thereby the workload of businesses and tax authorities. Before the second reading, the Government had introduced an amendment according to which the maximum retail price of cigars and cigarillos would be announced to an accuracy of 10 cents, instead of 50 cents as planned earlier, if their price is below or equal to EUR 10.

In addition, with a view to supporting the competitiveness of Estonian agricultural producers, the rise in the excise duties on diesel fuel for specific purposes planned for 2024–2027 will be cancelled. This means that the rate of excise duty on diesel fuel for specific purposes will remain at EUR 21 per 1,000 litres.

The Bill passed the second reading on 17 May, and 230 motions to amend it had been submitted by the deadline. On 8 June, the Government decided to declare the passing of the Bill a matter of confidence before the second reading and thereby also take over the duties of the lead committee. Motions to amend a Bill that has been declared to be a matter of confidence in the Government are not put to a vote.

The Riigikogu continued the debate which had been interrupted on Thursday, with Jüri Ratas and Maria Jufereva-Skuratovski (Estonian Centre Party Parliamentary Group), Rene Kokk, Andres Metsoja, Aivar Kokk, and Tõnis Lukas (Isamaa Parliamentary Group), and Leo Kunnas and Arvo Aller (Estonian Conservative People’s Party Parliamentary Group) taking the floor.

57 members of the Riigikogu voted in favour of passing the Act and 35 voted against.

The on Amendments to the Value Added Tax Act (147 SE), initiated by the Government, will increase the VAT rate from 20 to 22 per cent as of 1 January 2024.

While at first the Government intended to repeal the current nine per cent reduced rate for accommodation from 2025, an amendment made before the second reading increased the VAT rate less than originally planned, i.e. to 13 % instead of 22%. At the same time, the VAT rate on press publications will increase, reaching nine percent instead of five in 2025.

According to the explanatory memorandum, the purpose of the amendments is to move towards a balanced state budget by increasing the receipt of state revenue. Another purpose is to make the tax system more efficient by reducing VAT derogations.

The Bill initiated by the Government passed the first reading on 17 May, and 240 motions to amend it had been submitted by the deadline. On 8 June, the Government had decided to declare the passing of the Bill a matter of confidence before the second reading and thereby also take over the duties of the lead committee. Motions to amend a Bill that has been declared to be a matter of confidence in the Government are not put to a vote.

During the debate, Siim Pohlak, Kert Kingo, Helle-Moonika Helme, Rene Kokk, Kalle Grünthal, Evelin Poolamets, Alar Laneman, Henn Põlluaas, Arvo Aller, Jaak Valge, Varro Vooglaid, Mart Helme, Leo Kunnas, Ants Frosch, and Anti Poolamets (Estonian Conservative People’s Party Parliamentary Group), Aleksandr Tšaplõgin, Jaanus Karilaid, Andre Hanimägi, Jaak Aab, Tanel Kiik, Vadim Belobrovtsev and Maria Jufereva-Skuratovski (Estonian Centre Party Parliamentary Group), Aivar Kokk, Mart Maastik, Priit Sibul, Urmas Reinsalu, Riina Solman, Helir-Valdor Seeder, Andres Metsoja, and Tõnis Lukas (Isamaa Parliamentary Group), and Jürgen Ligi (Estonian Reform Party Parliamentary Group) took the floor.

59 members of the Riigikogu voted in favour of passing the Act and 35 voted against.

The Act on Amendments to the Income Tax Act and the Military Service Act (148 SE), initiated by the government, eliminates several tax advantages, raises the income tax rate, and replaces the regressive income tax exemption with a single income tax allowance.

From 2024, the Act eliminates the increased basic exemption for natural persons who maintain a child and the increased basic exemption for a spouse, as well as their right to deduct housing loan interest from their taxable income.

The income tax rate for natural persons and companies will rise by two percentage points in 2025, i.e. from 20 to 22 per cent. At the same time, the 14-per cent reduced rate on the regularly distributed profit of companies will be eliminated and, in connection with this, the seven-per cent income tax withheld on the dividend paid to natural person will also be eliminated. While the original Bill intended to raise the advance payments of income tax for credit institutions from 14 % to 22 %, the Government made an amendment into the Bill before the second reading, according to which the advance payment rate would increase by less than planned, or to 18 %.

The Act will eliminate the regressive income tax exemption and establish a single income tax allowance of EUR 700 per month, that is, EUR 8,400 per year from 2025. Persons of old-age pension age whose tax allowance is equal to the average old age pension will constitute an exception.

In addition, the Act will correct the inaccuracies that the European Commission has identified with regard to the transposition of the Anti-Tax Avoidance Directive 2 in the Income Tax Act, in order to avoid infringement proceedings from the European Commission. Also, a technical amendment will be made to the Military Service Act by omitting the reference to the provision to be repealed in the Income Tax Act.

The Bill passed the first reading on 17 May and received 377 motions to amend it by the deadline. On 8 June, the Government had decided to declare the passing of the Bill a matter of confidence before the second reading and thereby also take over the duties of the lead committee. Motions to amend a Bill that has been declared to be a matter of confidence in the Government are not put to a vote.

During the debate, Henn Põlluaas, Siim Pohlak, Jaak Valge, Kalle Grünthal, Varro Vooglaid, Ants Frosch, Mart Helme, Helle-Moonika Helme, Kert Kingo, Rene Kokk, Anti Poolamets, Evelin Poolamets, Leo Kunnas, Arvo Aller, and Alar Laneman (Estonian Conservative People’s Party Parliamentary Group), Jüri Ratas, Lauri Laats, Vadim Belobrovtsev, Andre Hanimägi, Tanel Kiik, Jaak Aab, and Ester Karuse (Estonian Centre Party Parliamentary Group), and Priit Sibul, Mart Maastik, Helir-Valdor Seeder, Aivar Kokk, Riina Solman, Tõnis Lukas, Andres Metsoja, and Urmas Reinsalu (Isamaa Parliamentary Group) took the floor.

58 members of the Riigikogu voted in favour of passing the Act and 33 voted against.

The Bill on Amendments to the Gambling Tax Act (146 SE), initiated by the Government, raises the tax rates on various types of gambling games in order to increase the state budget revenue.

The current five per cent tax rate for remote gambling and toto will be raised in two stages: to six per cent in 2024 and to seven per cent in 2026. The tax rate for lottery and commercial lottery will rise from 18 to 22 per cent from 2024, the gambling tables tax rate will rise from 1278.23 to 1406, and the tax rate for gambling machines for games of skill will rise from EUR 31.95 to EUR 32. According to the explanatory memorandum, the rise in tax rates is planned in such a manner that it would not significantly affect market participants and would not entail fundamental reorganisation in the gambling industry.

The Bill passed the first reading on 17 May and received 203 motions to amend it by the deadline. On 8 June, the Government had decided to declare the passing of the Bill a matter of confidence before the second reading and thereby also take over the duties of the lead committee. Motions to amend a Bill that has been declared to be a matter of confidence in the Government are not put to a vote.

During the debate, Tõnis Lukas and Priit Sibul (Isamaa Parliamentary Group) and Helle-Moonika Helme, Leo Kunnas, Anti Poolamets, Evelin Poolamets, and Mart Helme (Estonian Conservative People’s Party Parliamentary Group) took the floor.

58 members of the Riigikogu voted in favour of passing the Act and 22 voted against.

The Act on Amendments to the Family Law Act and Amendments to Other Associated Acts (207 SE), initiated by the Government, provides that two adults will be allowed to contract marriage regardless of their gender as of 1 January 2024. The implementing acts of the Registered Partnership Act would also be passed with the Act.

In addition to marriage, the possibility of concluding a cohabitation contract will remain, and according to the Act, registered partners will be able to make a simplified transition to marriage.

The Act will specify the regulation on filiation in the Family Law Act in connection with same-sex couples’ right to adopt. Same-sex spouses will get the right to adopt together through marriage equality. A spouse of the same sex will be able to adopt their spouse’s child with the consent of the biological parent of the child. The Act sets out the principle that a child may not have more than two parents. The principle that in particular the biological parents have the rights and obligations relating to the child will be maintained. The female spouse of the mother will have the relationship of filiation with the child when she grants her consent to the artificial insemination of the mother. When making amendments to the Bill before the second reading, the Government took into account the proposals of the Estonian Centre Party Parliamentary Group in order to set out more clearly in all Acts the principle that the second parent next to the mother is still first and foremost the father.

The Act will adopt the amendments enabling to realise to the full extent in practice the rights and obligations arising from the Registered Partnership Act adopted in 2014. The rights and obligations arising directly from registered partnership contract will not change. It will be possible for a registered partner to adopt only their registered partner’s child.

The Bill passed the second reading on 22 May and 711 motions to amend it had been submitted by the deadline. On 15 June, the Government had decided to declare the passing of the Bill a matter of confidence before the second reading and thereby also take over the duties of the lead committee. Motions to amend a Bill that has been declared to be a matter of confidence in the Government are not put to a vote.

During the debate, Varro Vooglaid, Helle-Moonika Helme, Jaak Valge, Kalle Grünthal, Kert Kingo, Rene Kokk, Ants Frosch, Mart Helme, Anti Poolamets, Arvo Aller, Evelin Poolamets, Siim Pohlak, and Henn Põlluaas (Estonian Conservative People’s Party Parliamentary Group), Mart Maastik, Priit Sibul, Riina Solman, Urmas Reinsalu, Andres Metsoja, and Tõnis Lukas (Isamaa Parliamentary Group), Maria Jufereva-Skuratovski, Anastassia Kovalenko-Kõlvart, Jaanus Karilaid, and Aleksandr Tšaplõgin (Estonian Centre Party Parliamentary Group), and Eduard Odinets (Social Democratic Party Parliamentary Group) took the floor.

55 members of the Riigikogu voted in favour of passing the Act and 34 voted against.

The Act on Amendments to the Government of the Republic Act and Other Associated Acts (216 SE), initiated by the Government of the Republic, the Ministry of the Environment will be reorganised into the Ministry of Climate and the Ministry of Rural Affairs will be reorganised into the Ministry of Regional Affairs and Agriculture. The functions of the Ministry of Finance concerning regional affairs will be transferred to the Ministry of Regional Affairs, the functions of the Ministry of Social Affairs concerning employment and social affairs will be transferred to the Ministry of Economic Affairs and Information Technology, and the coordination of accessibility will be transferred to the Ministry of Regional Affairs and Agriculture.

The Bill passed the first reading on 7 June and received 261 motions to amend it by the deadline. On 15 June, the Government had decided to declare the passing of the Bill a matter of confidence before the second reading and thereby also take over the duties of the lead committee. Motions to amend a Bill that has been declared to be a matter of confidence in the Government are not put to a vote.

During the debate, Tanel Kiik (Estonian Centre Party Parliamentary Group), Rene Kokk and Leo Kunnas (Estonian Conservative People’s Party Parliamentary Group) and Urmas Reinsalu (Isamaa Parliamentary Group) took the floor.

57 members of the Riigikogu voted in favour of passing the Act and 23 voted against.

The Bill on Amendments to the State Budget for 2023 Act (214 SE), initiated by the Government, contains two types of amendments. First, the proposals arising from the reorganisations in ministries, which are connected with the Act on Amendments to the Government of the Republic Act and Other Acts. According to it, as of 1 July 2023, the Ministry of the Environment will be reorganised into the Ministry of Climate and the Ministry of Rural Affairs will be reorganised into the Ministry of Regional Affairs and Agriculture. Amendments will also be made in the areas of government of ministries. Second, proposals to amend the budget have been received from the areas of government. They were submitted to the Ministry of Finance this April. Before the second reading, the Government introduced amendments into the Bill, prompted by the changing volumes of budgets in various fields of administration as well as the reorganisations in ministries.

The Bill passed the first reading on 5 June and received 304 motions to amend it by the deadline. On 15 June, the Government had decided to declare the passing of the Bill a matter of confidence before the second reading and thereby also take over the duties of the lead committee. Motions to amend a Bill that has been declared to be a matter of confidence in the Government are not put to a vote.

57 members of the Riigikogu voted in favour of passing the Act and 22 voted against.

The Act on Amendments to the Income Tax Act and the Act on Amendments to the Social Welfare Act and the Income Tax Act (215 SE), initiated by the Government, amends the principles for the allocation of income tax to local governments.

The Acts will increase the income tax allocated from the state pension of a resident natural person in 2024 from 1.88 per cent to 2.5 per cent. At the same time, the income tax allocated from other taxable income, except for the mandatory and supplementary funded pension and gains derived from the transfer of property, will be reduced from 12.06 per cent to 11.89 per cent. Income tax is received into the budget of the local government of the residence of the taxpayer.

During the debate, Andres Metsoja (Isamaa Parliamentary Group), Arvo Aller (Estonian Conservative People’s Party Parliamentary Group), Vadim Belobrovtsev (Estonian Centre Party Parliamentary Group), and Anti Allas (Social Democratic Party Parliamentary Group) took the floor.

58 members of the Riigikogu voted in favour of passing the Act and 26 voted against.

At the sitting, member of the Supreme Court Margit Vutt took the oath of office.

The sitting ended at 1.08 p.m. on Tuesday.

The next extraordinary session will start at 1.40 p.m. The agenda includes a motion of no confidence against the Prime Minister Kaja Kallas, initiated by 40 Members of the Riigikogu.

Photos of the sitting (author: Erik Peinar / Chancellery of the Riigikogu)

Verbatim record of the sitting (in Estonian)

The video recording of the sitting will be available to watch later on the Riigikogu YouTube channel.
(Please note that the recording will be uploaded with a delay.)

Riigikogu Press Service
Merilin Kruuse
Phone +372 631 6592, +372 510 6179
e-post merilin.kruuse@riigikogu.ee
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Link uudisele: The Riigikogu passed eight Acts

Source: Parliament of Estonia