New finmin candidate says new tax package not good news for economy, people

Jürgen Ligi. Photo: Dmitri Kotjuh

Jürgen Ligi, the Reform Party's candidate for the position of finance minister in the new government, said that Estonia's financial policy has been going downhill for the last 10 years, but the new tax package planned by the new coalition will not be good news for the economy and people.

Ligi said in an interview that since financial concerns have been ridiculed and the state budget looted, both old and new expenses must now be paid at the same time.

«I think that there has been order in the Ministry of Finance for the most part, although I am not sure if all the spirit has been preserved there, because the financial policy has nevertheless been going downhill for 10 years,» he added.

According to the future finance minister, the problem is that the political environment has changed.

«Financial concerns have been ridiculed for so long and the budget has been looted for so long that the political parties no longer have the spirit to speak on behalf of the Estonian government. In the case of these negotiations, I must say that some of this has returned. It was recognized that we have limits, and an agreement was made. We'll see how the implementation will go,» Ligi said.

According to him, the tax burden relative to GDP is the same as it was 20 or 25 years ago, and tax rates within it will indeed increase a few percent.

«Income tax and value added tax will increase. I am especially sorry if it is still believed that money can be taken from companies just like that. So this package is not good news for the economy,» Ligi said.

«It is also not good news for people, but our country is actually much more expensive than what has been paid for it so far. We still have a lot of old outstanding bills and the increase in expenses also needs to be covered. The additional expenses going directly to security alone are and can be bigger than this so-called security tax package,» the future finance minister added.

When asked how soon the economy will be in order, Ligi replied that the projection shows a decrease in the deficit.

«We will still be far from the kind of order as it has traditionally been called even in three or four years, but at least the finances are on a sustainable path. We must bear a certain amount of deficit, and of course, during crises, it is also natural to take on debts, but now the time has come when we have to start paying the expenses incurred and new expenses as well. The end of the war has not come nearer and the direct and indirect costs that have to be paid because of it are still very high in energy, military and other areas,» Ligi said.