In its agreement published on Friday, the new coalition in Estonia proposed to increase value-added tax, income tax, and excise taxes on alcohol, tobacco, and gasoline, in particular to meet defense spending goals.
This was reported by ERR.
The coalition agreement of the Reform Party, the Social Democratic Party and the Eesti 200 provides for an increase in VAT and income tax to 24% from July 2025 and 2026, respectively, as well as the introduction of a 2% corporate income tax from 2026.
These taxes, which will be in effect temporarily until the end of 2028, are presented in the program as part of a package of tax increases called the “defense tax.”
“The government that will come to power after the 2027 Diet elections will decide whether this tax is needed or will be changed,” the agreement says.
Author - Olena Madiak, 19/07/2024