The decision signifies that VAT on heating energy and fuelling materials will be slashed to 5 percent, down from the current 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 on heating energy from 5 to 18 percent, causing an abrupt surge in housing expenses for city residents.
Deputy Mayor of Tallinn Jaanus Mutlisaid tax increases directly affects the subsistence of all individuals and lowering of the VAT rate to the former level would somewhat relieve the social problems that had emerged.
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