The government intends to raise income tax, VAT and introduce a tax for entrepreneurs

To cover defense costs, the new government intends to raise income tax and turnover tax, as well as introduce a tax for entrepreneurs, reports rus.err.ee.

Defense spending has increased by 600 million euros annually, but fortunately, says Interior Minister Lauri Läänemets (SDP), the defense tax will be comprehensive – taxing consumption, income and business.

“In theory, it could be 4-5% of income tax or VAT. However, that would be too much for the average worker, so the tax would be much smaller and much more reasonable,” Läänemets commented.

Since the introduction of new taxes requires preparation of both the tax itself and society for it, there will be no security tax next year.

Politicians will distribute ministerial portfolios in the new government on Thursday, and they promise to reveal details of the coalition agreement on Friday.