Tax hike faces stiff opposition

TALLINN -- Estonia's ruling Reform Party has launched a signature-collecting campaign againstthe Center-led city government's plan to raise land tax in Tallinn.

"Raising the land tax... shows the city government'sindifference towards the inhabitants. We are collectingsignatures to demonstrate the people's opposition to theland tax hike," the head of the city council's Reformfaction, Remo Holsmer, said.

The citycouncil intends to raise the landtax rate by 2.5 times from the present 0.6 percent to 1.5percent of the annual assessed value.

The city government rejected Reformist councillor UlleRajasalu's proposal to lower the land tax rate to 0.3percent.

The hike is expected to boost the annual municipal budget revenue from the land tax to 320 million kroons (20.4m euros). Current land tax receipts are projected at128.9 million kroons.

The city government said that the yearly tax on a 900 square meter residential property in the suburb of Nomme,for instance, would rise from 1,782 (114 euros) to 4,455 kroons (285 euros), and theowner of an 800 square meter property zoned for business inthe central Viru Street would have to pay 78,876 kroons(5,040 euros) instead of the present 31,550 kroons (2,015 euros).

The land tax is payable in three instalments due April 15,July 15 and Oct. 15. Pensioners are entitled to a tax breakof up to 500 kroons (32 euros) per person.