Draft law amending the Income Tax Act and the Defence Service Act (432 SE) – First Reading
Session: 15th Riigikogu, 4th sitting, plenary session
Date: 2024-09-25 18:38
Participating Politicians:
Total Speeches: 21
Membership: 15
Agenda Duration: 32m
AI Summaries: 21/21 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The first reading concerned Bill 432, amending the Income Tax Act and the Defence Service Act, initiated by the Isamaa faction. The bill aims to maintain the state budget's balance during a crisis and to avoid the introduction of new taxes or increases to existing taxes, with the intention of preventing economic instability and ensuring citizens can cope. Isamaa argues that there is no need to create a new tax bracket within the current tax benefits and the existing Income Tax Act, and that additional revenue for the state budget could be generated through different considerations than those desired by the Reform Party leaders. The issue of tax revenue forecasts and potential impacts on social groups is also raised.
Decisions Made 1
Bill 432 was rejected in the first reading; the positions of the Riigikogu and the government have been coordinated. The government does not support the bill, and the finance committee also recommended rejection. As a final result, the Riigikogu decided to reject the bill and remove it from consideration; the vote resulted in 50 in favor, 15 against.
Most Active Speaker
The most active speaker in this discussion was Iov5Jop5kE4 (representative of the Isamaa faction), whose role is considered to be representing the right-wing political direction and advocating for the faction's positions.
Aseesimees Toomas Kivimägi
AI Summary
We now proceed to agenda item number 5: the first reading of Draft Bill 432 on amendments to the Income Tax Act and the Military Service Act, initiated by the Isamaa parliamentary group. Helir-Valdor Seeder is invited to the Riigikogu rostrum to present the bill.
Helir-Valdor Seeder
Profiling Isamaa fraktsioonAI Summary
Helir-Valdor Seeder called for support for the Isamaa bill, which seeks to prevent the state budget deficit from growing, postpone the Reform Party’s tax changes until 2028, and halt the introduction of new taxes that favor the wealthy while burdening those with lower incomes, all in the name of ensuring economic and social justice.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi offered his thanks and noted that there were no questions, and then asked Annely Akkermann, as the Chair of the Finance Committee, to present the positions and decisions of the leading committee from the Riigikogu rostrum.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
The Riigikogu Finance Committee discussed draft bill 432 during its first reading. The government did not support it, and the committee decided to reject the draft bill. However, attention focused on Isamaa submitting an identical draft bill and the resulting issue of two texts simultaneously taken into proceedings, which, having been later withdrawn, is not covered in this review.
Aseesimees Toomas Kivimägi
AI Summary
During the address, thanks are expressed and a request is made to Helir-Valdor Seeder.
Helir-Valdor Seeder
Profiling Isamaa fraktsioonAI Summary
Helir-Valdor Seeder stressed that the Finance Committee had failed to delve into the draft bill and that there had been no discussion, further asking whether the government had provided any reasoned arguments for its opposition.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
The government discussed but did not support the draft bill, which proposed that a general tax-free income allowance of 700 euros per month (8,400 euros per year) would take effect starting in 2028. Under this proposal, the marginal tax rate for income between 1,200 and 2,100 euros would be reduced from 34.5% to 22%. This change would lessen the tax wedge and impact all income-earning residents and the economy. The government has prepared a letter on this matter for the Finance Committee dated June 6, and we will discuss the issue of the tax wedge again in October.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi asks Helir-Valdor Seeder whether this is a procedural question or if something went wrong, noting that two questions are permitted and there is no need to use a procedural pretext. He thanks the rapporteur of the lead committee for the report and now invites Helir-Valdor Seeder to pose a question to the Chair of the sitting.
Helir-Valdor Seeder
Profiling Isamaa fraktsioonAI Summary
Helir-Valdor Seeder stressed that because the government has changed and the coalition agreement has been amended while the bill was being processed, the stance of the current government in office should be known regarding the draft legislation currently under procedure, rather than that of previous or earlier governments.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi stated that the government is likely aware of the bill's proceedings in the Riigikogu, and had they held a significantly different viewpoint, that information would have reached the Finance Committee. Since there is no such information, he assumes they hold the same position. Furthermore, he commended the Isamaa faction for withdrawing the second identical bill and, acting on behalf of Isamaa and under authorization, opened negotiations with Jaanus Karilaid.
Jaanus Karilaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Jaanus Karilaid stated that the draft bill resembles a tax festival and is a misleadingly planned tax bump, and recommended allowing it to proceed while supporting the Isamaa proposal, which would collect approximately one billion over two years and enable the funding of healthcare, extracurricular education, and investments utilizing European Union funds.
Aseesimees Arvo Aller
AI Summary
The Deputy Speaker thanks the previous speaker and gives the floor to Annely Akkermann to ask a question regarding the conduct of the sitting.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
Annely Akkermann stressed that Jaanus Karilaid is not a member of the Finance Committee, and although everyone was permitted to speak as much as they wanted, no discussion developed because the tax issue has already been debated multiple times and nobody has any clarity left on the matter.
Aseesimees Arvo Aller
AI Summary
The Deputy Speaker thanked the speaker and remarked that the issue was not related to the conduct of the sitting (perhaps it could have been cleared up with a response statement), and announced that Andrei Korobeinik of the Centre Party faction would speak next.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Andrei Korobeinik stated that while the draft bill is undoubtedly positive, the coalition is funding the pay rise for the rich by cutting pensions and social benefits and reducing unemployment support. He added that they won't see any compromises before the elections, meaning that lower-income people will ultimately foot the bill.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller thanked the rapporteur and said that Annely Akkermann would represent the Reform Party faction.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
Annely Akkermann, speaking on behalf of the Reform Party, confirms that income tax will not be levied on subsistence benefits or state social benefits, and that even that 2% rule does not apply—a point that has caused significant confusion.
Aseesimees Arvo Aller
AI Summary
The Deputy Chairman offers his thanks and refers to Andrei Korobeinik's question concerning the conduct of the session.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Andrei Korobeinik announced that a 2% state tax would be taken from all income, starting from the first euro.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller announced the lead committee's proposal to reject Bill 432 at the first reading, and preparations for the vote commenced.
Aseesimees Arvo Aller
AI Summary
50 members of the Riigikogu voted in favor of the proposal, 15 were against; Bill 432 has been rejected and is removed from the proceedings, thus we have successfully completed the fifth item on the agenda.