Estonia to set up framework for co-financing social infrastructure

TALLINN - The Estonian Ministry of Regional Affairs and Agriculture has drafted a legislative proposal to create a legal framework for local authorities and businesses to co-finance social infrastructure and for the payment of a local benefit levy by solar parks.

Minister of Regional Affairs and Agriculture Hendrik Johannes Terras explained in a press release that the legal framework for the levies has so far been unclear.

"The development levy for social infrastructure and the local benefit levy for solar parks have been ambiguously defined in the law, leading to unequal treatment of business operators," the minister said.

"In order to enable municipalities experiencing rapid population growth to build kindergartens and schools more quickly, co-financing by businesses must be based on clearer legal grounds," he noted.

Local governments have a constitutional right to decide on local matters and to impose local taxes and levies, taking into account the specific characteristics of their municipality or city. The use of the local benefit instrument is voluntary for municipalities, but if it is implemented, equal treatment of all entrepreneurs must be ensured.