Tax board zooms restaurants and hotels

The tax board has listed 150 catering and accommodation companies with suspicious cash transactions or that pay their employees suspiciously low wages, according to Kaido Lemendik, head of the tax board’s auditing department.

The tax office estimates that the state is losing 6.3 million euros a year from tax evasion in the catering and accommodation sector.

There are over 30,000 companies operating in the catering sector while more than 300 providers of accommodation services.

According to the tax board, cash makes up 50 percent of transactions in Tallinn restaurants and is therefore an easy possibility for companies to avoid paying taxes.

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Belgium will act as visa representative for Estonia in Nigeria and Congo

Estonia is to sign a visa representation accord with Belgium under which Belgium will represent Estonia in visa issuance in two African countries. According to the draft that came out of the Estonian Foreign Ministry, Belgium will act as visa representative for Estonia in Nigeria and the Democratic Republic of the Congo. The agreement would be concluded for an indefinite term and take effect from 1 April .

Estonia has concluded visa representation agreements with Austria, Denmark, Finland, France, Germany, Hungary, Latvia, Lithuania, the Netherlands, Poland, Slovenia, Spain, Sweden and Switzerland for the issuance of visas in 84 countries where Estonia does not have a representation of its own.

Source: Estonian Review

Growth slowdown should calm wage expectations

Last year, the Estonian labour market recovered from the recession. The central bank’s latest Labour Market Review reveals that employment soared in comparison with the recent past and also with other European countries. The labour participation rate posted a record and unemployment declined notably. At the same time, the share of the long-term unemployed among the unemployed increased, making up about 60% by the end of 2011.

The inhibition in economic growth at the end of 2011 may increase the share of the long-term unemployed even more in the future. Being unemployed for a long time reduces the likelihood of finding a job and increases the risk of such people losing hope of ever becoming employed again. Thus, the main task of labour market policy is to increase the competitiveness of the long-term unemployed.

Along with the recovery of employment, average wage growth accelerated in 2011. It started in the private sector, where it was also faster. Labour productivity soared when the economy started to recover, but its growth rate has been declining ever since. Productivity even dropped in the last quarter of 2011 due to the deceleration in economic growth. Should it slow in the coming quarters as well, wage growth is likely to exceed labour productivity growth again. This may pressure companies to either increase the price of their products or to reduce wage costs by decreasing the number of their employees.

In order to avoid inflationary pressures threatening the economic balance, over-optimistic wage expectations and wage claims in the currently uncertain economic environment should be avoided.

Author: Natalja Viilmann, Eesti Pank, economist

Source: Bank of Estonia

Estonian police to take into use electric cars

The Estonian police intends to take into use electric cars with the aim of economy of expenses, Interior Minister Ken-Martin Vaher told parliament on Monday.

Application of electric cars is being very seriously considered and in all likelihood it will go into operation already this year.

Vaher said that issues connected with the price of fuel concerned the Interior Ministry sphere of administration the most. “As a result we will attempt to do everything we can in order to compensate the the rise in fuel prices, in order to foresee as far possible.”

To compensate the prices rise, Vaher said, various different options were looked for, such as acquisition of new vehicles that are energy and fuel saving.

In 2011, Vaher said, the police received 151 new vehicles and there are plans to acquire 266 more cars. In case of new vehicles diesel was chosen as their fuel, which contracted fuel consumption by nearly 30 percent.

The Police and Border Guard Board, too, has started contracting the number of run-down vehicles during 2012. The financial economy as a result of the contraction, Vaher said, was nearly 180,000 euros a year.

Source: Estonian Review

Revenues of daily Postimees grow 11 pct

Revenues of the Estonian media company AS Postimees, a holding of the Norwegian Schibsted group, totaled 11.4 million euros last year, up by 11 percent compared to the year-earlier 10.29 million euros.

The profit of the company was 450,000 euros compared to 154,000 euros in 2010.

Advertising income made up 5.4 million euros of the revenue. The income from subscription declined by about 1 percent in annual comparison to 5.07 million euros, it appears from the annual report.

The average print run of Postimees was 57,350 copies, down by 1.4 percent year-on-year. Data of the polling company TNS Emor show that the readership of all dailies decreased by around 8 percent in 2011, the company observes. Postimees had an average of 186,000 readers daily last year. The Russian-language version of the daily had 51,000 readers on the average, figures provided by TNS Emor show. The online news sites of Postimees had an audience of 850,000 at the end of last year, up by 20 percent from 2010.

The paper’s direct variable expenses (newsprint, printing, delivery) totaled 4.96 million euros in 2011, making up 44.6 percent of all expenses. Outlays on personnel (pay, extras, taxes) together with training expenses made up 3.59 million euros or 32.3 percent of total expenses. Payroll costs together with the social tax grew to 3.53 million euros from the year-earlier 2.93 million euros and the number of employees rose to 186 from 163 in 2010.

The sum total of expenses increased by 8.1 percent to 10.95 million euros.

Source: Estonian Review

PISA testing starts in nation’s schools

From today through May 4, 15-year-olds at 206 selected schools around the country will be filling out test forms for the Program for International Student Assessment (PISA), an OECD-organized study conducted worldwide every three years.

The aim of PISA 2012 is to assess whether 15-year-old students have acquired the necessary skills for full participation in society by the end of their compulsory education.

In total, 6,450 Estonian students born in 1996 will take part in the survey, which presents a number of problems set in real-world contexts. Participanting schools were drawn at random from all types of schools providing compulsory education.

This year’s PISA will focus specifically on the students’ knowledge of mathematics and natural sciences, assessing them through tests they will fill out electronically. In addition, 1,200 randomly-chosen students will have to fill out a separate financial literacy survey.

In total, 67 countries are participating in the survey, with the results to be made public by the end of 2013.

The PISA survey was first conducted in 2000. Estonia began participating in 2006.

Source: Estonian Review

New mail parcel service between Estonia, Finland

Starting from Wednesday it is possible for residents of Estonia and Finland to send Smartpost packages to the neighbouring country’s high-tech distribution facilities and post offices.

Itella Smartpost said that the new service has generated great interest among business clients, the large proportion of which are international e-tradesmen. “The exchange of packages with Finland opens new opportunities both for private consumers as well as for catalogue department stores and e-tradesmen,” managing director of Itella Smartpost Risto Eelmaa said. He said that the most popular goods Estonians buy from Finland are clothes and home electronics.

The cost of sending the smallest package to the other country’s Smartpost distribution facility is 10 euros and of the biggest one 14 euros. The prices are slightly higher on sending parcels to Finnish post offices.

In Finland, Smartpost has 50 and in Estonia 52 distribution facilities. Via Smartpost it is possible to send parcels from Estonia to 1 050 Finnish post offices. This year Itella will extend its parcel distribution facilities network to 100.

Source: Estonian Review

Bank of Estonia to contribute quarter of profits to state treasury

The Bank of Estonia board decided on Tuesday to transfer three-quarters of its 22.7 million euros’ worth of earnings from last year to the central bank’s reserves and to contribute the remaining sum of 5.7 million euros to the state treasury.
In addition, the board determined that the central bank’s capital level must be increased to match the Bank of Estonia’s share in the euro system, meaning that the central bank must boost its capital from the current 0.37 billion euros to 1.31 billion euros.

Currently, the Bank of Estonia’s capital level represents 0.07% of the euro system’s capital, while the its share in the euro system amounts to 0.26%.

“The supervisory board made a far-reaching decision that will guarantee the Bank of Estonia’s trustworthiness. The risks facing the central bank have grown and the bank’s reserves must be proportional to the risks. People trust the central bank when it is financially independent,” said the chairman of the bank’s supervisory board, Jaan Männik.

In addition, the supervisory board decided that until the reserves have been increased, the Bank of Estonia cannot contribute more than 25% of its annual profits to the state treasury.

Last year, the Bank of Estonia earned 20.2 million euros in profits from the euro system’s (the central banks of the Eurozone countries and the European Central Bank) joint activities, including monetary policy operations and cash emissions, and 14.7 million euros from the bank’s financial operations. The bank’s other profits amounted to 6.2 million euros, including 3.5 million euros from the sale of coin metal and 2.1 million euros from the sale of collector coins, while its operational expenditure for the previous year ran up to 19.4 million euros.

Source: Estonian Review

Nine out of ten plastic bottles recycled

Last year, Estonians returned 89% of all the plastic bottles that they bought. Another 81% of glass bottles and 61% of tin cans were also recovered. The company in charge of collecting, sorting, transporting and recycling returnable beverage containers, Eesti Pandipakend, said recovery centers received 8% more returnables in 2011 compared to the year before – amounting to 223 million containers.

Plastic bottles and tin cans were returned the most. Recovery of tin cans increased by 20% compared to the year before, while the rate for plastic bottles stayed the same. Collection of glass bottles grew by 13%.

The sale of returnable containers also increased in 2011 by 10%, according to Rauno Raal, the company’s CEO. “The market is recovering and the economy has improved. I am happy that this has not had a negative impact on the environmentally friendly mentality and behavior,” said Raal.

Most of the returnable containers are for bottled water, soft drinks, beer and other alcoholic drinks. Consumers pay a deposit of 4 to 8 cents on returnable containers which is refunded at the collection point.

Source: Estonian Review

Estonia to be visible on Google Street View

AS Regio, an Estonian provider of location-based solutions, has finished taking images of Estonian tourist attractions and streets for Google’s Street View application and forwarded the data to Google, the daily Õhtuleht says. The company hopes the service will be implemented in the second quarter of the year.

Regio collected GPS positioning data, photos, and images of objects and traffic signs by laser scanning for Street View during the summer months last year.

Project manager Sven Veskioja said the whole process has basically ended for Regio and it now only has to wait for when the Map application will be made available by Google. “We do not have a firm agreement but according to preliminary information the service should become available in the summer,” he said.

Source: Estonian Review


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