Estonia: Reform leader calls for end to graduated rate tax, privatization of state cos

  • 2018-08-17
  • LETA/TBT Staff

TALLINN – The program of the Estonian Reform Party for the March 2019 general elections calls for the discontinuation of the system of graduated rate income tax and privatization of state held and municipality held businesses, its appears from the first portion of the party's economic platform for the polls published by party leader Kaja Kallas on her homepage.

The economic program is divided into six main sections: simplification of the tax system, additional financing of innovation, implementation of large scale infrastructure projects, creation of a globally competitive business environment, developing of capital markets, and reducing the share of the state in the economy.

"The present government has created a tax chaos which must be eliminated. The tax system of the Reform Party is clear and just, and easy to manage. We will introduce a basic exemption of 500 euros for all and do away with the complex tax tiers," Kallas said.

The Reform Party also is planning to lower excise duties.

Investments in research and development would be raised to a level equaling at least 1 percent of gross domestic product (GDP), the innovation component will be made mandatory to a bigger degree than to date in public procurement, and information concerning state owned companies and companies having a dominant influence on the market made public, "in order for new companies to be able to develop innovative products and services based on that information."

To make the infrastructure of Estonia functional, the Tallinn-Tartu, Tallinn-Parnu and Tallinn-Narva roads are to be rebuilt into four-lane roads and the construction of the Rail Baltic rail link started.

"We support the establishment of the Tallinn-Helsinki tunnel and the Saaremaa bridge," Kallas said.

To develop capital markets, the Reform Party wishes to offer people more options within the framework of the second and third pillars of the pension system. The party also wishes to establish a new support for small and medium sized businesses.

"We will develop a suitable solution, such as a Kredex guarantee, that would improve access for small businesses to loans meant for the expansion or upgrade of manufacturing," Kallas said.

"Just like we don't want the state to start regulating what happens in people's bedrooms, we also don't want the state to interfere in the activities of business operators too much. The economy functions better when business operators can do what they are able to do best and don't have to deal with excessive bureaucracy," the chairman of the Reform Party said.

According to Kallas, the state should be active in business only if this is inevitable for reasons of security or other reasons. The party speaks up for the privatization of state owned and municipally owned business which do not fall under these criteria.