The coalition of the Reform Party, Social Democrats and Eesti 200 plans to introduce an extraordinary income tax of two percent. This tax will not take into account the non-taxable minimum, that is, all people, including pensioners, with low incomes will also be required to pay this two percent, writes ERR. /nginx/o/2024/07/03/16196980t1hd809.jpg)
Money. The photo is illustrative. Photo: Peeter Lilleväli
The coalition of the Reform Party, Social Democrats and Eesti 200 plans to introduce an extraordinary income tax of two percent. This tax will not take into account the non-taxable minimum, that is, all people, including pensioners, with low incomes will also be required to pay this two percent, writes ERR .
Translation: Valeria Ermakova
Estonia currently has a so-called “tax hump”, which allows you to receive up to 654 euros per month without paying income tax. According to the coalition's plans, this threshold will remain in effect until the end of next year. This means that for working people with a monthly income of up to 1,200 euros, the first 654 euros are not subject to tax.
If you only increase the income tax rate, the burden on low-income people will not change significantly. For example, a pensioner with an income of 774 euros per month will completely avoid the tax increase.
However, if an additional tax of two percent is introduced, which does not take into account the non-taxable minimum, then the tax burden on people with a minimum salary will increase by 15.8 euros per month, which will amount to 190 euros per year. For pensioners with an average pension, the tax will be 15.5 euros per month or 186 euros per year.
