Tõniste: Raise VAT in lieu of multiple other taxes

Following Helir-Valdor Seeder's election as chairman of the Pro Patria and Res Publica Union (IRL), the coalition has begun rethinking its tax package. According to IRL candidate for Minister of Finance Toomas Tõniste, instead of raising multiple other taxes, he would just increase VAT.

"Personally, instead of a good number of other taxes which create confusion and bureaucracy, I would perhaps increase the VAT by one percent and tax consummption," Tõniste said in an interview with ETV news broadcast "Aktuaalne kaamera" on Wednesday evening. "In this sense, the money is going to a noble cause — people's income. The tax-free income of low wage earners is increasing to €500."

Chancellor of Justice Ülle Madise has disputed the coalition's plan to increase the alcohol excise duty in the Supreme Court. Estonia's top court is expected to issue a ruling on the matter no later than mid-July.

Tõnise confirmed that he does not have a back-up plan should the Supreme Court rule in Madise's favor. "I haven't thought that far ahead yet, that there would be a plan B and C," he admitted. "My plan is still that we have as low of taxes as possible and as few new taxes as possible."

One of Tõniste's own businesses is a wholesaler involved in the sale of alcoholic beverages, among other things. He confirmed, however, that this would not affect his future position as Minister of Finance.

"Alcohol is a very small portion of my business and there is absolutely no connection here to the government and Riigikogu's decisions regarding alcohol policy," he explained. "But this is a longer topic. It is very simple to increase excise duties and write more money into the budget, but we're still seeing today where this ends up going. Cross-border trade, how people go buy alcohol abroad, tourists not coming here anymore as they find that Estonia is expensive — this is still ultimately a problem if it is done so quickly and thoughtlessly."

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