Estonia, Financial Services, Legislation, Taxation

"The dramatic events during the past six months have shown that we can't manage the current tax system. New tax policy means that all kinds of income tax deductions must be stopped," the Minister of Finance of Estonia Ivari Padar noted.

According to Padar, ineffective income tax returns regarding the first and the second children must also be interrupted, since it is highly expensive for Estonia's taxpayers, and it does not help poorer families.

"The tax deduction on the first child will take a billion from the state budget soon. Most Estonians should expect the upper limit of parental allowance to be brought lower," Padar described the government's plans adding that they want to keep themselves from tax raises that fasten inflation or stop entrepreneurship – whether these are VAT or excise taxes.