The decision signifies that VAT on heatingenergy and fuelling materials will be slashed to 5 percent, down from thecurrent 18 percent as of January 1, 2010.
The cuts bring the heating tax rate in line with previous levels. In 2007 the government increased the tax onheating energy from 5 to 18 percent, causing an abrupt surge in housingexpenses for city residents.
Deputy Mayor of Tallinn Jaanus Mutlisaid tax increases directly affects the subsistence of all individuals andlowering of the VAT rate to the former level would somewhat relieve the socialproblems that had emerged.
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