Estonia, Financial Services, Insurance, Legislation, Markets and Companies, Taxation
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Saturday, 20.09.2025, 21:01
Estonian Unemployment Insurance Fund recommends lowering unemployment tax to 2.1%
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The proposal received four for and two against votes as the representatives of trade unions and employers voted for and that of the government against it.
UIF council chairman, social minister Taavi Rõivas stressed the need to take into account risk scenarios. "Although Estonia has done very well and a fast fall of unemployment has accompanied economic growth, we shouldn’t let success blind us and repeat the mistakes made during the boom era," said Rõivas.
"If the unemployment continues to fall, cutting the tax rate is certainly possible in the future," said Rõivas.
The proposals about unemployment insurance tax rate has to be made by UIF council but the government is not obliged to listen to it.
Trade unions and employers say that the tax rate should be cut since UIF reserves are so big. As of the end of July, the reserves of the UIF amount to 498 million euros.
The tax rate is 3%, of which the employee pays 2% and employer 1%.
The tax was lowered from the start of this year from 4.2%. Before the economic crisis, the tax rate was just 0.9%.
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