Next year could prove financially stressful for many Estonians.
Tax reform in general has been a topic of much heateddiscussion in 2008 with Estonian Social Democrats party leading the way.
"The tax reform as it is being implemented in Estonia forseveral years has not made Estonians happier nor the economy richer. We shouldnow agree not to cut taxes further until adopting the euro," said Eiki Nestor,a leading Social Democrat told reporters.
Several tax cut plans have been put on hold in 2009 but thepromised tax rate reduction will eventually go from 21 to 18 percent says theruling coalition.
In order to save 80 million kroons (5 million euro) familieswith more than one child will no longer receive the 450 kroon (28 euro) onetime payment previously given with each new child.
In another step backwards, the only year old law of allowing newfathers ten-days of paid leave will be revoked.
State dental benefits are also to be revoked in 2009 with theexception of infants under 1 year.
As with Latvia,the new VAT laws will also increase the tax on medicines from 5-9 percent.
In addition to these amendments, various fees such as visaapplications, ID cards and residence permits will double in 2009.