Economic development committee: H1 was successful for Estonia's business diplomacy

  • 2020-10-13
  • BNS/TBT Staff

TALLINN – Despite the difficulties connected with the pandemic spread of coronavirus, the first half of 2020 was successful for Estonia's business diplomacy, the government's economic development committee has found. 

The committee noted that the first half of the year was successful in particular in the more faraway markets, where interest towards innovative digital solutions keeps growing.

"The COVID-19 pandemic helped give global reach to the notion of how important are secure and reliable digital solutions in the fields of health, education and business. This notion will open the door to the global markets for Estonian companies active in e-services and cyber security," Estonian Prime Minister Juri Ratas said in a press release.

Ratas said that, for example, Estonia and the World Health Organization (WHO) a week ago signed a memorandum of understanding which enables to start cooperation in projects in e-health. On Dec. 16, Estonia and the United Arab Emirates will stage an online global business summit at which digital solutions from both countries for the public and the private sector will be showcased. 

Foreign Minister Urmas Reinsalu observed that the current year has been a major challenge for businesses, and it is a goal of the Ministry of Foreign Affairs to offer in a situation like this flexible support to business operators on foreign markets and in strengthening international business.

Among other things, the ministry this year expanded its network of business diplomats and economic advisers with representatives in Geneva, Tokyo, Abu Dhabi, Riga and Washington.

"An ambassador at large for economic matters for Africa has started work, we are preparing for the opening of embassies in South Korea and Singapore for the purpose of strengthening international business," he said.

According to Reinsalu, a feedback survey conducted lately showed that also business operators are satisfied with the support offered by the Ministry of Foreign Affairs.   

According to the economic development committee, they are working also in order for the steps by the Ministry of Foreign Affairs, the Ministry of Economic Affairs and Communications and Enterprise Estonia in supporting business operators and investors to be better coordinated. The need for this was highlighted in a report on business diplomacy by the National Audit Office.

Also an analysis of the competitiveness of the Estonian tax system, the commissioning of which is a part of the government's action plan, was presented to the members of the committee. The analysis looked at the competitiveness of Estonia when it comes to the tax system more broadly, as well as the competitiveness of the industrial sector more narrowly compared with Latvia, Lithuania, Poland, Finland and Germany.

The analysis did not look at labor taxes.

A comparison of 12 taxes and charges contained in the analysis led to the conclusion that according to international indexes and surveys, the Estonian tax system is among the best in the world, whereas the competitiveness of the industrial sector rather is intermediate and Estonia stands out for having few tax exceptions in place for industrial enterprises in terms of environmental charges and energy taxes. 

To improve the competitiveness of Estonian enterprises, the proposal has been made to expand more favorable electricity taxes to apply to a greater number of companies and a permanent reduction to be made in the rates of the mineral resource extraction charge and water abstraction charge.

Based on the findings of the analysis, the committee decided to continue preparations for the differentiation of the renewable energy charge for large consumers.

The creation of a differentiated system, which will reduce the renewable energy charge for large consumers within the limits permitted in the state aid guidelines by up to 85 percent on the condition that no other group of consumers will have to pay a greater amount in the fee than it does at present, was supported by the Cabinet at its sitting on Sept. 3. 

The Ministry of Economic Affairs and Communications will prepare a draft legislation by the beginning of next year that will enable to cut the charge for energy intensive business operators which strive towards greater energy efficiency.