Since 2025, the taxation of residents in Estonia has increased noticeably. And considering that prices in shops are not dropping and the amount of municipal payments is still not enjoyable, this situation of does could cause anxiety. Tell tell us, which of the news in the taxation are affecting your life most and why?Estonia’s tax burden, which expresses the portion of tax receipts in the volume of domestic product (GDP), has increased over the last five years . While in 2019 year the tax burden was 33.1% of GDP, by 2024 it had increased to 35.1%. According to Minfin’s forecast, the tax burden in 2025 year is 35.8% of GDP, which is 0.7%
higher than in 2024 year. What was exactly changed or will change in 2025? The income tax rate has increased to 22%, the automobile tax and the safety tax (the latter is supposed to include an increase in NWS from 22% to 24 from 1 July July 2025 year). In addition, the rate of land tax on commercial and industrial land is increased from the current 1% to 2%. Taxes and duties – for example, on the conclusion and dissolution of marriage or the registration
of vehicles, and also vaccines on tobacco and alcohol. It is worth noting that the previous tax burden of Estonia compared with other countries of the European Union was substantially lower. The increase in the last years indicates that Estonia is approaching the European average level. An increase in the tax time could affect the investment climate of the country and the economic environment in a broader meaning. Businessmen
have already expressedconcern that increasing tax burden could reduce the attractiveness of investment in Estonia. By the way, the need for taxes is likely to also become more complicated. In particular, this will affect “salaries in an envelope”. We remind you that such a practice is illegal, and paying and receiving such wages not only reduces workers’ sense of security, but also hinders the development of the country as a whole. The Ministry of Finance has already prepared a legislation that would give the Taxes to the Customs Department the ability to require from businesses to tax the workforce and in the case, when the department cannot prove to who, when and how much was paid with wages “in an envelope.” Officials hope that through the change
thestatewillreceiveabout1.7millioneurosinadditionalincome.
