/nginx/o/2013/02/20/1585896t1hf37f.jpg)
Head of parliamentary finance committee Sven Sester (IRL) yesterday said that from 2014, basic exemption might probably be raised by 15 per cent, from €144 to €165, meaning that people would keep extra €4.41 of monthly salary.
Basic exemption rise would fatten purse by €4
Please note that the article is more than five years old and belongs to our archive. We do not update the content of the archives, so it may be necessary to consult newer sources.
According to Mr Sester, the final word on basic exemption rise can be said at the beginning of April, upon publication of spring economic forecast by Ministry of Finance.
«However, signs in economy point to a real possibility of raising income tax exemption minimum by 15 per cent,» said Mr Sester via press release.
At yesterday’s Riigikogu Finance Committee meeting, IRL did not support Centre Party’s and Social Democrats’ proposals on basic exemption, being planned by not lowering income tax rate. In 2015, income tax is lowered from 21 to 20 per cent.
Mr Sester said the 15 per cent basic exemption raise could be covered by economic growth, without raising other direct taxes. In his opinion, a rise of that calibre would ensure income tax not eating away part of pensions’ increase, next year, the pensioners keeping basic exemption for their total pension payment.
Raising basic exemption was advised for Estonia by Organisation of Economic Co-operation and Development (OECD), its report underlining that low income Estonians’ tax rate is high as compared to other countries.
The topic came up more seriously, however, at the start of this year, when minister of finance Jürgen Ligi (Reform Party) also gave his voice in support of raising basic exemption. Different rates have been mentioned. Entrepreneur and politician Tõnis Palts (IRL) proposed quickly raising basic exemption to €500. Mr Ligi considered that far from prudent and unaffordable for the state.