IMF: more to be done to fix economy

TALLINN (BNS) - A mission from the International Monetary Fund told
Finance Minister Siim Kallas Sept. 17 that Estonia's decision to
scrap the corporate income tax may produce results but will not be
sufficient to turn the country's economic tide.

Peter Keller, head of the IMF mission to Estonia, underlined during
the meeting that Estonia should not increase its loan burden, the
minister's adviser, Daniel Vaarik, said. This was the first
ministerial-level meeting in the process of drawing up an economic
policy memorandum to IMF.

In the assessment that was handed over to Kallas, the IMF finds the
new income tax bill "may achieve its aim" and "is well written," the
adviser said.

The IMF's point of view, the biggest problem in the context of the
new law is temporary decline in tax revenue, Vaarik said.

Keller recommended to Estonia that it postpone borrowing until the
time when the pension reform is geared, Vaarik said.

The minister and the IMF also talked about the timetable of writing
the new economic policy memorandum and about the Estonian state
budget.