Estonian Prime Minister Taavi Roivas survived a vote of no confidence in parliament on Monday, sidestepping the second serious challenge to him and his two-month-old coalition government related to the package of tax changes that the coalition wants to push through to secure sources of financing for its government program.
The motion of no confidence handed in by the opposition Center Party was rejected in the 101-seat chamber with votes 41 to 59 and no abstentions. The motion required at least 51 votes to be carried.
Voting for the motion were MPs from the opposition parties Center, Free Party and the Estonian Conservative People's Party (EKRE).
Earlier on Monday the parliament had voted 58 to 41, with no abstentions, to pass the key part of the tax package that the government also had tied to a confidence vote. Two more votes are to be taken on the coalition sponsored legislative amendments as part of the same emergency sitting of the parliament that started at 11 a.m. on Monday, both of which the government has tied to a confidence vote.
Before the vote on the Center Party motion signed by 33 MPs the prime minister and leader of the Reform Party spent more than two hours answering lawmakers' questions.
In his remarks, Roivas said that shifting of the tax burden from the taxation of workforce towards taxation of consumption will contribute to economic growth. «The less taxes we impose on the income earned with the hard work of the people, the better competition conditions we create for Estonia so that more jobs would be created here; the more domestic and foreign investments this policy brings to Estonia, the faster the economy can grow. Reducing the taxes on labor has a positive effect on economic growth,» he said.
«I totally understand that in short perspective people are not satisfied that the fuel excise duty will rise,» Roivas said. «But I consider it my duty to explain to people that all this is in the name of greater purposes, so that we could sustainably grow as an economy, that taxes on labor could be reduced in Estonia, that it would be possible to improve the subsistence of families with children, significantly increase the benefit for the third child, that it would be possible to support single pensioners and single parents through the single pensioners support measure, which we plan to implement from the year after the next, and also to establish the maintenance allowance fund for single parents,» Roivas said.
In the words of the prime minister, the Social Democratic Party, the Pro Patria and Res Publica Union and the Reform Party have formed a government whose mission is to solve the great challenges faced by Estonia. «The government with its budget strategy has created possibilities for supporting the agreed upon great aims and at the same time keeping the revenues and expenditures of the state balanced during the next four years,» he said.
Announcing the start of the collection of parliament members' signatures in support of the motion of no confidence against the prime minister last week, vice chair of the Center Party and head of its parliamentary group Kadri Simson said the main reason for the move is that the Roivas-led government is pushing through negative tax changes of which no mention whatsoever was made before the March general election.
«The government of the republic launched on June 1 a bill of amendments to the Social Tax Act, Income Tax Act and other laws, whose main content is raising of the fuel excise duty and value added tax rate on the accommodation service. In our view, these tax changes clearly worsen the wellbeing of the Estonian people and are consequently unacceptable,» Simson said.
«When you look at the Reform Party's election platform you won't find a single word about the fuel duty rise in it. There was no specific talk about raising VAT for accommodation establishments either, on the contrary – on the eve of the elections Roivas denied tax hike plans in a live broadcast on ETV. It is obvious that the prime minister was prevaricating in the name of a better election result. Such policy on the part of the government head is not acceptable. Because of that, the Center Party group in the Riigikogu will start collecting signatures for a no-confidence vote against Roivas and we certainly expect other members of parliament to support it,» the Centrist politician said.