Estonia, Financial Services, Legislation, Markets and Companies, Taxation

According to unconfirmed data, Sester proposed a plan to cancel the fuel excise tax increase in the fourth consecutive year of planned increases and preserve the lower VAT rate for accommodation institutions. Instead, the excise duty on tobacco and alcohol could be raised and the public sector reduced.

Sester said after the meeting that it is necessary to adjust both the revenue and the expenditure side and different positions were discussed. He said that final decisions will come in mid-May – when the budget strategy is announced.

The government press office said they also discussed, for example, the proposal to increase the daily rate of fines, as well as the proposal to increase excise duties on alcohol and tobacco, in addition to the originally planned 10 and 5% by an additional 5% in 2016. Both proposals were discussed, but a decision was not adopted.

The discussion over scrapping the VAT concession on accommodation establishments will be continued at the next cabinet meeting but basically, it was found that the Chamber of Commerce and Industry proposal to raise the VAT rate by smaller steps, in stages, it is worth analysing.

"We need to work seriously still to make sure that the budgets are balanced in the next four years. We look forward to further suggestions from the Ministry of Finance on how to cover the deficit," said Prime Minister Taavi Rõivas.