Moody’s praises Estonia’s fiscal policy

 In its fresh sovereign credit report on Estonia, the international ratings agency Moody’s Investors Service praised the country’s financial strength and flexibility in the deteriorated economic situation.
Moody’s specifically said that Estonia’s A1 government bond ratings with a negative outlook are based on its high economic, institutional and government financial strength, but are constrained by lingering [...]

Excise duty on fuel, electric power to go up in 2010

Parliamentary finance committee has approved the plan to increase fuel excise duty, writes aripaev.ee.
If the proposal made by the Reform Party, IRL and Greens is approved by MPs, it would add to the price 0.45 kroons per litre of petrol and 0.42 kroons per litre of diesel fuel. According to the plan, also the price [...]

2008 was profitable for private persons

According to Statistics Estonia, tax benefits turned the year 2008 an unprecedented profitable tax year for the residents of Estonia, enabling substantially to reduce the tax burden of the employed persons.

During the last five years several tax changes profitable for private persons have taken place. The income tax rate was lowered from 26% to 21% [...]

Lithuania to increase VAT to 21 pct

Lithuanian lawmakers gave final approval to an increase in the value added tax to 21 percent as the government copes with faltering tax revenue, Bloomberg writes.

Lawmakers voted 66-34, with 18 abstentions, to approve the change, according to Parliament’s Web site. The increase from 19 percent will come into force on Sept. 1.
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Double tax doesn’t bring victory

The state’s hope to earn EEK 370 mln with doubling fringe benefit tax on official cars seems to be wishful thinking for the companies write official cars to employees’ name, Äripäev reports.

On September 18 last year the government decided to increase fringe benefit tax from EEK 2000 to EEK 4000 from January 1, 2009.
Tax experts [...]

Administrative prices not flexible enough

According to Statistics Estonia, the cost of the Estonian CPI basket remained unchanged in June. The price level was 0.9 per cent lower compared to June 2008. Euro area inflation was at a historical low, being 0.1 per cent down from a year ago.
The export outlook of Estonian enterprises is still bleak and the decline [...]

Government increased unemployment insurance fee

The government approved increasing unemployment insurance fee 4.2 pct from August 1 to December 31 so that the Unemployment Fund could cover their higher expenditures due to the economic downturn and new layoff rules, aripaev.ee reports.
Therefore employees have to pay 2.8 pct of their salary and employer adds 1.4 pct. According to the forecast the [...]

Estonia’s business climate changes

Today will bring last years’ record amount of law amendments, which affect all entrepreneurs mostly painfully, Äripäev reports.

The new Employment Act is some consolation besides VAT and excise duty increase, if unemployment insurance fee will be increased more than once.
Märt Riisenber, the chairperson of OÜ Kehtna Mõis’ management board said that his family is most [...]

VAT 20% as of July 1

Value added tax will increase from 18% to 20% as of July 1, 2009.
Unfortunately no additional information available in English from government sources.
VAT taxation information at the Estonian Tax and Customs Board: telephone +372 880 0813, e-mail: kaibemaksemta.ee

Economist: raise of VAT rate will deepen recession

The upcoming increase of VAT rate and raise of excise duties on motor fuel will deepen economic recession, not ease it, says economist Viktor Trasberg. Trasberg who teaches economics in Tartu University says that Estonian government is doing the same what IMF did in Latvia. “In Latvia, the extremely incompetent recommendations of IMF to increase consumption [...]