Taxman had enough

Photo: Liis Treimann

By businessmen and politicians alike, warm words were said regarding the Tax Board chief Marek Helm who dramatically quit his post yesterday. Meanwhile, interpretations vary.

«For me, it is very important not to endanger cooperation with entrepreneurs. Therefore, I asked finance minister to decide it I may continue on the job,» Mr Helm announced by press release, referring to the indignation at controls of company cars. Usually one to kindly explain things to journalists, after the unexpected announcement he now proved unreachable for clarifications.

Estonian Chamber of Commerce and Industry, earlier sharply critical towards chances in VAT payment, was deeply surprised at the news. «For Tax Board director-general to step down a reason could be breach of the law, undignified behaviour, or negligence at work, but according to my knowledge, no-one has found such fault with Mr Helm,» said the chamber’s director-general Madis Palts.

According to Mr Palts, the VAT amendment regarding company cars is not prudent as resulting ineffective work at Tax Board and increased paperwork for entrepreneurs. Also, it needs to be found out if Tax Board violated surveillance rules while executing blanket control [on company car use, recently – edit]. «Whether the law as such is prudent one needs to ask the lawgivers, and this is no problem of Tax Board’s or Marek Helm’s,» said Mr Palts.

Estonian Association of SMEs, however, interpreted blanket control of company cars as demonstration by Mr Helm targeted at lawgivers – to point to the impracticability of the VAT Act amendment. 

«Meeting with us, Mr Helm said the Tax Board did not like the amendment either,» said the association’s president Kersti Kracht. «As it turned out that four times less than planned was collected from car VAT, Mr Helm let it be understood by the blanket control that the amendment does not work.»

SMEs do not support Mr Helm leaving office and think it best not to hurry with signing his application.

«It is nice that, by his action, Mr Helm showed the finance ministry subjected to Reform Party the true nature of things,» assessed Ms Kracht.

Riigikogu Finance Committee chairman Rannar Vassiljev (SDE) praised Mr Helm for reorganisations of work at Tax Board and expressed hopes he’d not be leaving after all. «I see nothing extraordinary in businessmen being upset when tax load is raised,» explained Mr Vassiljev. «The Tax Board head might continue as the law amendments were prepared at the initiative of Tax Board and finance ministry, and in very close cooperation with Finance Committee.»

Starting December 1^st 2014, input VAT can be deducted by no more that 50 percent at purchase of company car or vehicles under contract of use.  The same limit is imposed to purchasing goods and services to passenger cars. The entire VAT may only be deducted with passenger cars used to business travel alone.