Estonians see 2009 as a year of tax increases

Dec 30, 2008
TBT staff

TALLINN-2009 isn't looking to good for Estonian taxpayers, as several new laws passed will not cut taxes as voters had expected.

Tax reform in general has been a topic of much heated discussion in 2008 with Estonian Social Democrats party leading the way.

"The tax reform as it is being implemented in Estonia for several years has not made Estonians happier nor the economy richer. We should now agree not to cut taxes further until adopting the euro," said Eiki Nestor, a leading Social Democrat told reporters.

Several tax cut plans have been put on hold in 2009 but the promised tax rate reduction will eventually go from 21 to 18 percent says the ruling coalition.

In order to save 80 million kroons (5 million euro) families with more than one child will no longer receive the 450 kroon (28 euro) one time payment previously given with each new child.

In another step backwards, the only year old law of allowing new fathers ten-days of paid leave will be revoked.

State dental benefits are also to be revoked in 2009 with the exception of infants under 1 year.

As with Latvia, the new VAT laws will also increase the tax on medicines from 5-9 percent.

In addition to these amendments, various fees such as visa applications, ID cards and residence permits will double in 2009.

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