Analytics, Estonia, EU – Baltic States, Financial Services, Markets and Companies, Taxation, Wages

“I would not automatically equalize profits and greed, – he started – Sustainable companies must be profitable because it ensures that capacity to invest. Profit is not the amount that the owner puts in his pocket, but the resource that the company uses to repay its loans. By the end of 2012, the total profit of Estonian companies was 3.6 billion euros, while the total business liabilities totaled 26 billion euros, according to Statistics Estonia. This means that companies will pay their profit of 7 years back in loans. If you look at the results of international banks that operate in Estonia, it would not be hard for them to increase gross wages of their customer service people to 1,000 euros a month, as Indrek Neivelt suggested. In the garment industry, it may be more difficult because of competition".

"High labour taxes is the reason why Estonian exporters that sell their product in Finland often cannot pay similar wages as in Finland, – he said –I asked some businessmen in other countries what is the total business cost of 1,000 euro net wages. The results, converted into euros, were as follows: 1,164 euros in UK, 1,379 in Finland, 1,490 euros in Sweden, 1,961 in Hungary and 2,000 euros in Italy. In Estonia, the cost to the business is1,856 euros. However, if an Estonian company increases its net wages to 1,000 euros, it would cost the company 478 euros more than in Finland".

In other words, if Estonia had the labour taxes of Finland, Estonian companies could notably increase wages of their employees.