Estonia: Coalition discusses reducing tax-free income threshold

The Estonian Reform Party has proposed reducing the tax-free income threshold to boost government budget revenue, Prime Minister Kaja Kallas revealed, ERR reports. However, she said that Reform’s coalition partners, Estonia 200 and the Social Democratic Party (SDE), opposed the idea due to its potential adverse impact on low-income earners. Interior Minister Lauri Läänemets of SDE argued that reducing the tax-free threshold would only be justifiable for individuals with higher income. Foreign Minister Margus Tsahkna of Estonia 200 said that fiscal policy discussions for the new coalition were still ongoing. The current tax-free thresholds are EUR 654 per month for those employed and EUR 776 for pensioners.