Tsahkna: We are willing to study the idea of ​​payroll tax | Estonia

“Although it was a bit unexpected, as far as I know, this was also a proposal from some business organizations. After all, we have reached a very clear agreement.”
What this security measure would look like was discussed in the joint negotiations just a few weeks ago. He would be very extensive. It affects all natural persons, but also all entrepreneurs. But when we start discussing our budget process, we are willing to study this proposal, “Czakna told ERR.

Chuckner said that based on the information he had, Ligi’s proposal had both positive and negative aspects.

“On the positive side, it will certainly be easier to administer this tax in this way because then there will be no hiding of income and the wages of all entrepreneurs can be calculated very clearly,” Chakner said.

“But on the other hand, it has a material impact, which is negative. That is, those who have more employees will be hit, in other words, it is actually increasing the tax burden on labor. And if we look at what is the challenge facing our economy, it is precisely the manufacturing industry, where there are more jobs, especially those that are exported, but they find themselves in a worse situation,” Chuckner added.

“Instead, companies that don’t have jobs and are engaged in mediation and financial activities will win. They will stay away from this tax more,” he said.

“We are not discussing Estonia 200 as we did to open the coalition agreement. But this is clearly a different solution from what we agreed on. We only agreed on one, two and three items of the security tax, but the question of how it will proceed as a whole will be as broad as possible so that it is temporary and solidaristic, that is, all social groups will participate in this security tax. The security tax package should be unpacked and recalculated,” said Czakna.

“But as a person in business, what concerns me is that we are not treating entrepreneurs unequally and harming our industry,” Chuckner said.

Finance Minister Jürgen Ligi (RE) said in an interview with ERR last Friday that he is considering imposing an additional 2% tax on all wages of company employees instead of prepaying income tax on corporate profits. Ligi said that taxation would be easier and would not be a burden on businesses.

Social Democratic Party chairwoman Lauri Läänemets criticized Ligi’s payroll tax idea on Monday, saying it restricted the movement of wealth and economic growth.

When the security tax is established in the association agreement, the security tax consists of three parts, namely 2% of the turnover from July 1, 2025, 2% of the income of natural persons from January 1, 2026, and 2% of the company’s profit from January 1, 2026.