Tax Reform

Parliament in June approved a package of government-sponsored measures aimed primarily at reducing the overall tax burden, but also at increasing the possibility of Estonia adopting the euro by 2011-2012 and tackling public health and environmental concerns. The flat rate of income tax is to fall by one percentage point annually to 18% in 2011, while at the same time the tax threshold is to steadily increase from EEK 2,000 at present to EEK 3,000. To compensate, the few remaining value-added tax (VAT) exemptions will gradually be removed and excise rates on alcohol, tobacco, fuel and electricity will be increased

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