Minister of Finance: Income tax should be reduced | New
Writing on social media, the minister said the move would help local governments fund the costs of maintenance and care.
Pentus-Rosimannus wrote that Estonian taxes on labor are too high while the costs of health and social care need to be better funded in an aging society. “This can be done by looking at the whole tax system, not by choosing individual taxes,” she said.
The Minister of Finance has said that elderly care and its funding are big problems. Instead of the idea of a social insurance tax – which was suggested by the Center Party – this should have been considered before the last government changed the pensions of the second pillar pension fund.
“Funding for care is part of the overall increase in health and social costs of an aging society, which must also be viewed as a whole,” she said.
Pentus-Rosimannus said the revenue base for local governments could be increased while the share of income tax sent to the state should be reduced.
“We could discuss how to increase the revenue base of local communities so that they can provide care for the elderly and cover the growing burden without new taxes. One option is to increase the revenue base of local governments at the expense of the state. income tax, ”said Pentus-Rosimannus.
Currently, the general income tax rate is 20 per cent in Estonia, and of this amount 11.96 per cent goes to local authorities. The minister said the income tax rate could be reduced to 13-15 percent and would then go entirely to local governments.
According to the minister, in addition to the review of the system, more investments in mental health must be made due to the rising costs of health care.
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