The Riigikogu passed the Act on supplementary budget

The aim of  the Act on the State’s Supplementary Budget for 2024 (456 SE), initiated by the Government, is to ensure the financial stability and sustainability of the country. With the supplementary budget, Estonia will comply with the European Union’s budget rule under which the budget deficit must remain within 3% of GDP.

The measures in the negative supplementary budget amount to a total of 183 million euro, which will improve the budget position by 173 million euro. The Act on supplementary budget includes nearly 115 million euro in savings measures and 68 million euro in additional revenues. Savings in the state’s current expenditure will mainly concern management and operating costs, and public foundations will also have to contribute to savings. More dividends will be taken from state-owned companies to increase state revenues.

On 8 December last year, the Riigikogu adopted the state budget for 2024, which had a revenue volume of around 16.7 billion euro and an expenditure volume of around 17.7 billion and an investment budget of around 817 million euro and a financing transactions budget of 1.4 billion.

During the debate, Andrei Korobeinik (Centre Party) and Urmas Reinsalu (Isamaa) took the floor.

61 members of the Riigikogu voted in favour of passing the Act and 12 were against.

The Act on Amendments to the Land Tax Act (437 SE), initiated by the Government, increases local governments’ decision-making power in determining land tax. The amendment of the Act will not mean an increase in land tax to a greater extent than provided by the current Act. The tax relief for land under homes will remain in place, but its amount will be decided by municipal councils which will be given greater discretion for this.

At present, the fiscal autonomy of local governments is insufficient, leaving municipalities dependent on central government funding decisions. This forces municipalities to wait for state funding when making their budgets, which in turn hinders forward planning for local life. Increasing fiscal autonomy at local government level will allow municipalities to strike a better balance between the level of services and the imposition of taxes.

In 2025, the annual increase in land tax will be subject to a uniform national ceiling of up to 50 percent, and 20 euro in the case when the 50 percent increase in an amount of land tax is less than 20 euro. From 2026 onwards, local governments will be able to set their own limit for the annual increase in land tax, ranging from ten to one hundred percent. Land tax cannot exceed the amount of the land tax calculated on the basis of the taxable value of the land and the land tax rate.

According to the Act, the nationwide area-based tax relief for land under homes will be abolished from 2026, but local governments will be able to decide on the size of the amount-based tax relief for land under homes. The relief may be up to a thousand euro and land tax will have to be paid for the part exceeding the tax relief. A higher land tax can be paid in two instalments: by 31 March and 1 October. The Act increases the amount of the first payment from 64 euro to 100 euro.

Pursuant to the Act, from 2025 the maximum tax rate on residential land and land parcels located within yards on profit yielding land will be increased from 0.5 per cent to one per cent of the taxable value of the land. The maximum rate of land tax on “other land”, such as commercial land, production land and transport land, will also be increased from one per cent to two per cent of the taxable value of the land.

In addition, the Act makes a specification that land in state ownership with intended purpose of public construction works land will be exempt from tax only if the land is used by a state agency or local government agency.

Land tax is currently the only property tax in Estonia that has remained at the same level since 2012.

During the debate, Aivar Kokk (Isamaa), Lauri Laats (Centre Party) and Varro Vooglaid (Estonian Conservative People’s Party) took the floor.

56 members of the Riigikogu voted in favour of passing the Act and 20 were against.

The Act on Amendments to the Information Society Services Act and the Penal Code (224 SE), initiated by the Government, brings Estonian law into conformity with the EU Regulation on addressing the dissemination of terrorist content online.

The main aim of the Regulation is to improve cooperation with hosting service providers in the EU in order to enhance the removal of terrorist content online. The Regulation concerns social media, as well as video, image and audio-sharing services in the case of which, at the request of users, the hosting service provider publishes web content which is publicly available and which is not subject to access restrictions, for example, password or encryption.

According to the Act, hosting service providers are required to adopt the necessary measures to prevent the spread of terrorist content online and in the event of the existence of such content they are required to remove or disable access to it. The Act also regulates the division of tasks in order that it would be possible for competent authorities to implement measures arising from the Regulation and to exercise supervision over compliance with the obligations of hosting service providers.

In addition, the Act amends the provision on incitement to acts of terrorism in the Penal Code so that, in the future, it will be possible to also hold liable persons who incite to the commission of acts of terrorism when they issue incitements in a manner hidden from the public, for example, in moderated forums or groups.

63 members of the Riigikogu voted in favour of passing the Act and one was against.

The Act on the Accession to the Convention for the Establishment of a European Organization for Nuclear Research and its Financial Protocol and Protocol on Privileges and Immunities (451 SE), initiated by the Government, allows Estonia to become a full member of the European Organization for Nuclear Research (CERN).

Estonia has been engaging in research cooperation with CERN since 1996. Estonia becoming a full member of CERN will open doors for Estonian businesses who will be able to participate in CERN procurements without limitations in the future. Namely, the total financial volume of contracts won by Estonian companies in a year and the employment and traineeship contracts of people with Estonian citizenship working at CERN is limited to the amount of the annual membership fee which was 1.45 million euro in 2023. By becoming a CERN member state, Estonia will be released of this limitation. CERN’s procurements are technology-intensive and rigorous, and thanks to CERN’s reputation, winning them is a very high quality mark for an exporting company. In cooperation with CERN, it is also possible to develop new products and technologies and to bring knowledge from cutting-edge science to business.

The European Organization for Nuclear Research (CERN) was established on 29 September 1954. CERN provides for collaboration among European States in nuclear research and in research related thereto. 23 countries are members of CERN. In order to become a full member of CERN, it is necessary to accede to the Convention for the Establishment of CERN and its Financial Protocol and the Protocol on the Privileges and Immunities of CERN. The associate member status is mandatory for new member states before becoming a full member. Estonia was granted associate member status on 1 February 2021.

66 members of the Riigikogu voted in favour of passing the Act.

Verbatim record of the sitting (in Estonian)

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

Riigikogu Press Service
Gunnar Paal
+372 631 6351, +372 5190 2837
gunnar.paal@riigikogu.ee
Questions: press@riigikogu.ee

Link uudisele: The Riigikogu passed the Act on supplementary budget

Source: Parliament of Estonia