On December 11 December the Riigikogu adopted a law on the defense tax, according to which enterprises are obliged from 1 July of the current year to pay the tax in the amount of 2 percent>of turnover, and from 1 January of the next year – 2 percent of profit. Individuals will also begin to pay tax in the
amount of 2 percent of income from 1
January of the new year. /nginx/o/2023/02/15/15/15139899t1h306b.jpg)
Photo: Eero Eero Vabamägi / Postimees
On December 11 December the Riigikogu passed the Law on a tax on defense, under which enterprises are obliged from 1 July of the current year to pay tax in the amount of 2 percent of the turnover, and from 1 January of
the next year – 2 percent of profit. Individuals will also begin paying the tax at 2 percent of income from 1 January of the Contribution to national defense is a patriotic matter, but it is important that all details be clear. Now today this is not the case, and the impression is that for business many many things will be dependent on the arbitrariness of tax inspectors. The Tax and Customs Department refuses to comment on the details of taxation, citing that there is still time, and the Department now has more urgent business. For businesses this issue is far far from abstract – it is related to the specific monetary amounts that we need to budget in this year. By today it is known that the new tax will bring two substantial changes. This could become a serious problem. For example, if the land or real estate of company X increases in the appraisal, the increase in the value of the assets would be considered profit, even though sales and income didn’t occur. But the money to pay the tax will have to be found. Second, the defense tax will be the first advance tax for businesses. The tax will be collected based on past activities, without considering whether the new year will have any profit to be taxed. With this the Tax and Customs Department nothing needs to prove. Even in the most unfair cases businessmen will better to immediately pay the tax and then try to return it through the court, because failure to pay is subject to penalties – 0.06 percent per day, which is 21.9 percent per year. This percentage is comparable to expensive consumer loans. Postimees thinks that the contribution to the country’s defense is extremely important, but in this case the impressions are that the tax on defense is an expensive and complex system, causing unnecessary discontent. It seems that the purpose was not to tax property (which is easily measured and the loss of which in the war is a real risk), but to tax income. It is supposed that entrepreneurs are apparently unwilling to declare honestly their income and seek to optimize profits. But there is no reason to consider entrepreneurs unpatriotic. In the event ofwartheyhavesomethingtolose.Asthecurrenttaxisunfortunatelydislikedandnotcontributes tostrengtheningpatriotism. Surprisingly,there is stillconfusionaroundthedefensetax.TheGovernmentandtheTax and CustomsDepartmentareunabletoclearlyexplaintotaxpayers,howandwhatthetaxiscollected,howitisusedandhowthepubliccancontrolitsenforcement.Allthisdestroystrustinthegovernment. Allthisdestroystrustinthegovernment.
