First Reading of the Draft Act on Amending the Income Tax Act (Bill 443 SE)
Session: 15th Riigikogu, 3rd session, plenary sitting
Date: 2024-06-06 07:46
Participating Politicians:
Total Speeches: 7
Membership: 15
Agenda Duration: 9m
AI Summaries: 7/7 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The agenda item concerned the first reading of Bill 443, the draft act amending the Income Tax Act, initiated by the Government of the Republic. The objective of the bill is to alleviate regional inequality in Estonia, where high-paying jobs and wealth are primarily concentrated in Harju and Tartu counties, leaving local governments (LG) in peripheral areas in a difficult financial situation. Regional Minister Piret Hartman explained that since it is not possible to significantly increase the equalization fund due to the state budget deficit, a mechanism for redistributing income tax is proposed. This involves the gradual increase of the portion of income tax allocated from the state pension of a resident natural person and the reduction of the portion allocated from other taxable income, until both portions are equal (10.23%) by 2027. This should expand the revenue base of those local governments that have a larger elderly population and a lower average income.
Madis Kallas, representative of the Finance Committee, confirmed that the committee considered the bill extremely important and received exhaustive answers from ministry officials regarding the involvement and the impacts of the funding model. During negotiations, Anti Allas, speaking on behalf of the Social Democratic Party faction, supported the bill, emphasizing its necessity for maintaining the capacity of local governments to provide minimum services. The first reading was concluded, and the deadline for submitting amendments was set for the end of June.
Decisions Made 2
The first reading of Bill 443 was concluded.
The deadline for the submission of amendments was set as 5:15 PM on June 20, 2024.
Aseesimees Toomas Kivimägi
AI Summary
The tenth item on the agenda concerns the first reading of Draft Act 443, initiated by the Government of the Republic, regarding amendments to the Income Tax Act. The presentation will be given by Regional Minister Piret Hartman.
Regionaalminister Piret Hartman
AI Summary
Regional Minister Piret Hartman explains that the draft legislation facilitates the redistribution of income tax. This measure will boost the revenue of local governments with lower incomes, ensuring equal access to local services nationwide (such as schools, kindergartens, and libraries), thereby reducing regional inequality. Furthermore, the bill introduces land tax autonomy and CO2 support mechanisms.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi thanked the speaker for the presentation, announced that there were no questions, and invited Madis Kallas—the representative of the leading committee taking the Riigikogu floor and a member of the Finance Committee—to deliver a co-presentation.
Madis Kallas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The Riigikogu Finance Committee discussed the government’s draft bill amending the Income Tax Act. The committee unanimously adopted decisions regarding moving the bill to the plenary session agenda, concluding the first reading, and setting the deadline for submitting amendments. Madis Kallas was appointed as the committee’s lead representative. Furthermore, the committee noted that this is an extremely important bill and expressed hope for equally substantive and productive discussions during the subsequent readings.
Aseesimees Toomas Kivimägi
AI Summary
Anti Allas thanks everyone, states there are no questions, and opens the discussion on behalf of the Social Democratic Party faction.
Anti Allas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Anti Allas briefly stated that the draft bill is crucial for maintaining the capacity of Estonian local governments to provide services, even if only at a minimal scope and quality. He added that the coalition has reached an agreement to adopt the law no later than September.
Aseesimees Toomas Kivimägi
AI Summary
Negotiations have concluded; the first reading of Bill 443 has been completed, and the deadline for submitting amendments is June 20th at 5:15 PM.