In recent weeks, the topic of Russian travel into the European Union has become the subject of public debate in Estonia and Finland. Many Russians are taking advantage of the fact that the Finns lifted the pandemic restrictions this July as the opening of the Finnish-Russian border is an opportunity for them to use Finland as a transit point to other European countries.
Estonia has witnessed several changes of government in the last few years. In July 18, there has been another one. However, Estonia’s success story as the most economically and technologically developed country in transition has not stopped yet. The previous Prime Minister, Kaja Kallas, has now retaken his position as the new Prime Minister, thus ensuring that his country manages well under transition.
Estonia is doing all it can to maintain its current income tax system in the EU tax debate, Minister of Finance Keit Pentus-Rosimannus (Reform) told ERR on Tuesday, confirming reports of Estonia, alongside Hungary, blocking a revised set of EU tax rules.
Estonian Prime Minister Kaja Kallas (Reform) said the situation in Ukraine is worrying and NATO cannot go along with Russia’s demands. She said allies see things more clearly after the Crimea occupation and do not underestimate the situation.
Mobile network operators welcome the decision by Estonian Minister of Entrepreneurship and Information Technology Andres Sutt (Reform) to put three 5G frequency authorizations up for auction instead of four.
Estonia, Latvia, and starting from this year Poland (partly) are taxing profits earned by companies only at the dividend payout time. Such a model promises to raise both domestic and foreign investment, and it can help the economy recover from the crisis more quickly. The opponents of this taxation system in Lithuania argue that various benefits, which alleviate the burden on business and encourage investment where it is most needed, are already in place.
“The income tax rate could be reduced to 13-15%, sending all income tax to local governments and reducing labor taxes” suggested the Minister of Finance Keit Pentus-Rosimannus (Reform) on Monday. Writing on social media, the minister said this move would help local governments to finance maintenance and care costs. She also wrote that Estonian labor taxes are too high while health care and social care costs need to be better funded in an aging society.
“Digital services of the European Union member states must be made available to all citizens of the EU” says the Minister of Entrepreneurship and IT Andres Sutt (Reform). Sutt made his comments at a time when the Union has rolled out a timetable for greater and more integrated pan-EU digital services, including digital wallets.
The Ministry of Economic Affairs and Communications for Estonia, wants to analyze the existing use of e-receipts and to propose a new service to be introduced by 2025. “Although e-receipt has been available as a service in Estonia for a long time, it is still used relatively little. Larger stores offer the possibility of a digital receipt already now, but more often it’s still paperwork that we can see today. (…)” said Andres Sutt, the Estonian minister.
Lithuania ranks sixth in the Global Tax Competitiveness Index but it has the least attractive corporate tax regime in the Baltic region. It taxes retained and reinvested profits and applies a personal income tax when dividends are paid out. The effective combined tax rate stands at 27.7%. Estonia and Latvia tax only redistributed profits, at 20%.
