Editorial: tax law change breeds quitting feeling

Photo: Urmas Nemvalts

For finance minister Maris Lauri, quit slip by Tax and Custom Board director-general Marek Helm was a suddenly. Turns out, she was not the only one surprised. The board has done well. Rather, the decision smells like VAT law amendment and the related changes in how the institution had to operate. 

Till lately, it mattered not how much private travel a company car did. Last December, a difference appeared: for those who want the personal needs driven driving, only half of VAT is returned – not all. But what’s the use of a law without checks? The one to check it out naturally had to be Tax Board.

As they got busy, indignation followed. Hence the «I quit» slip. The Tax Board undertook to inspect parking lots where a driver on business travel usually has no business. Mostly, these were spots around recreation areas and places of entertainment. In random control in such parks, 11 official cars were detected, allegedly used for business and now caught «having fun».

According to Sorainen sworn lawyer Karin Madisson, here the tax board was testing the thin lawful/unlawful line. Had the board possessed lists of official cars the owners of which were suspected in private rides, the activity would have been lawful. Otherwise – if lists were only compiled after the parks were raided – what the board did may be deemed unlawful. The board said what they did was lawful to the fullest and any talk of surveillance is out of the question.

But it is a broader issue. On the one hand, it had become obvious that there were thousands of companies with no turnover but with a car – the earlier law perhaps not utilised as intended, always. On the other hand: is the current amendment prudent? The expected added revenue never came, and tax board had loads of extra work on their hands. Some say that by the car park checks, Mr Helm may have desired to point out the bad in the new rules.

But whatever they had in mind, here we stand: on finance minister’s table, there lies a piece of paper requiring a response. To react, Maris Lauri took time out till next week.