Draft law amending the Accounting Act and, as a consequence, amending other laws (516 SE) - second reading
Session: 15th Riigikogu, 4th session, plenary session
Date: 2024-12-11 22:36
Participating Politicians:
Total Speeches: 53
Membership: 15
Agenda Duration: 55m
AI Summaries: 53/53 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The draft law amending the Accounting Act and, consequently, other laws, for the second reading was discussed within the first and only agenda item. The draft concerns changes to the rates of accounting and auditing obligations, with the aim of reducing the administrative burden on entrepreneurs and making auditing obligations more proportional, taking into account the actual indicators of current legislation and the economic situation. The Economic Committee prepared amendments that were primarily of a technical nature, aiming not to change the content significantly but to improve linguistic and technical accuracy. The views of interest groups (the Board of Auditors, the Chamber of Commerce and Industry) were included in the draft law’s process, and the Ministry of Finance represented the initiator’s position. Discussions with interest groups took place in a working group, and compromise solutions were developed, along with a need for future analysis, including an analysis of thresholds every two years.
The discussion mainly focused on what threshold (50% versus 25% and 20% in the future) would be sufficient and what impact it would have on the volume of auditing and the administrative burden on entrepreneurs. The Committee’s position was to emphasize the need for an analysis by the Ministry of Finance and to take into account the figures for 2023 and near-term forecasts to avoid sudden and excessively burdensome changes for the market. Ultimately, in collaboration with the initiator’s representatives, a proposal was made to ensure that an assessment and, if necessary, changes to the thresholds are included every two years, and to address the concerns of interest groups with a compromise solution of 25% immediately and 20% two years later. The leading committee carried out the procedure and scheduled the second reading and final vote, but ultimately decided to end the second reading and allow for the preparation of the third reading later, leaving open the possibility of a final vote on December 17th.
Decisions Made 2
The Economic Affairs Committee proposed that the bill be put on the agenda of the full parliament for a second reading on December 11th of this year and to conclude the second reading; should the second reading be concluded, the committee's proposal is to move the bill to a third reading and to conduct a final vote on December 17th.
The Isamaa faction's proposal to interrupt the second reading of bill 516 (expressed goal: a two-year pause and a later drastic change) received 9 votes in favor, 49 against, and 1 abstention; the proposal did not receive support. The leading committee decided to conclude the second reading of the bill and continue the procedure with the following points; the conclusion of the second reading has been confirmed and the procedure for the second reading has been concluded.
Most Active Speaker
The most active speaker in this discussion is Jaak Aab (id 3iK35z0_4VM), who is the chairman of the economic affairs committee. He represents the Centre Party and has previously held key positions in the government and parliament's work; in this context, he moves around the center of the political spectrum (leaning far towards both right- and left-leaning topics).
Aseesimees Toomas Kivimägi
AI Summary
The Estonian Parliament will discuss the 13th item on the agenda, which concerns the government-initiated draft amendment to the Accounting Act, the second reading of Draft Bill No. 516, and the presenter is the chairman of the Economic Committee, Jaak Aab.
AI Summary
Jaak Aab informed that the government-initiated amendment to the Accounting Act bill, in the Economic Committee's proceedings, included technical and substantive changes, including a 25% increase in the rates underlying liabilities, and therefore the number of audited companies would decrease by about 1,800; Isamaa's proposal to raise it by 50% did not receive the committee's support; and for the bill's second reading the plenary was placed on the agenda for December 11, with the final vote to take place on December 17.
Aseesimees Toomas Kivimägi
AI Summary
The speech expresses gratitude for the efficient use of time and invites Arvo Aller to pose a question.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller asks the committee whether the concept of the balance sheet date is replaced by the report date, and whether the report date marks six months after the end of the financial year or some specific date.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman Toomas Kivimägi asked Priit Sibul to take the floor.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul asks where the 1800-company cap came from and why it is correct and optimal, and that with Isamaa's proposal there would have been even more of these companies.
AI Summary
Jaak Aab said that the compromise is 25% immediately and 20% after two years, after which every two years an analysis with stakeholder groups is carried out and, if necessary, the law is amended to ensure the continuity of the auditing obligation and the trust of companies in their annual financial statements.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman asked Arvo Alleri to speak.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller raises the question of consistency in the context of suspending procedures and asks why, in assessment, one may rely on sales revenue instead of the revenue for the reporting year, while in defining micro-, small-, and medium-sized enterprises one must take into account the revenue for the reporting year, and where this difference comes from and how it is justified.
AI Summary
Upon reading the explanatory note, I see that the amendment reduces the number of these companies, and, in certain cases, equates micro- and small-sized enterprises for which this obligation arises, and it concerns the submission of accounting overviews and reports.
Aseesimees Toomas Kivimägi
AI Summary
Vice-chairman Toomas Kivimägi invites Tarmo Tamme to speak.
Tarmo Tamm
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
According to Eesti 200, the cap should be raised by 50%, and during this discussion a conclusion was reached that at least two years from now we will discuss the same topic again in the committee and will support a further 20% increase of the cap.
AI Summary
Jaak Aab said that they had taken on the task, and the Economic Committee is monitoring whether the Ministry of Finance conducts the necessary analyses and submits the appropriate proposals in a timely manner; if necessary, the threshold limits or the conditions of audit control will be changed, and in the near future the same topic will be addressed under the Audit Activity Act — everything is recorded in the protocol.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman Toomas Kivimägi invites Mart Maastik to speak.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik described how the Chamber of Commerce and Industry proposed to raise the internal audit threshold by 50%, with 25% in the first year and 20% in the second year as a compromise, which was supported by auditors and entrepreneurs, but opposed by the Minister of Finance, and he asked whom we actually represent in the Riigikogu—the Minister of Finance's interests or the entrepreneurs' interests.
AI Summary
Jaak Aab said that the Economic Committee monitors both the economy and entrepreneurs, and the decision must be based on a clear impact assessment, prepared by the Ministry of Finance together with the Chamber of Auditors and the Chamber of Commerce and Industry, and although there was no written response, the Chamber of Commerce and Industry is basically in agreement with the compromise, according to which it would be 25% now and 20% in two years.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman Toomas Kivimägi asked Priit Sibul to perform.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul asks why the Economic Affairs Committee did not implement a phased approach in the bill, and why it would not have been possible to move this topic downward in steps, so that auditors could plan and we would not have to keep returning to the topic.
AI Summary
Jaak Aab said that changes must be based on a clear impact assessment, and the extent of the auditor's obligation depends on the companies' turnover and assets, not on inflation, and he clarified the 2022 figures (about 7,900 audited reports) and noted that forecasts may change depending on the current situation.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman, Toomas Kivimägi, summons Mart Maastik to appear before him.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maastik emphasized that, according to the Ministry of Finance's position for 2016, the share of audited and reviewed accounting reports should be kept at 80% +/- 3% of GDP and of the asset base, and this is also in line with the 50% limit, because according to the Chamber of Commerce and Industry table, at the 50% level revenue would be about 78% and assets about 86%, so the requirements are actually met, and he finally asked what additional data would be needed.
AI Summary
Jaak Aab said that data changes over time and there are no precise data for 2023, therefore forecasts are uncertain; for example, the asset coverage of companies with an audit obligation is 88%, but the number of such companies makes up only 3.8%, and with a 25% increase in asset size it would drop by 1 percentage point, but the number of companies with an audit obligation falls from 3.8% to 3%, which is positive because it reduces administrative burden, and after two years we will be able to assess whether the thresholds should be changed.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi thanked, said that there were no more questions, opened negotiations, and invited Mart Maastik.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik said that although the law is not inherently bad, he cannot support it at the moment because of the nuances, since raising the 50% cap on audits and reviews would increase the audit burden due to assets that have been affected by inflation, and because of a shortage of auditors and high costs it would be a significant burden for many companies, therefore he proposed a compromise of 25% in the first year and 20% in the following year, but there was no consent and additional time was requested.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman Toomas Kivimägi asks for three more minutes.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maastik emphasized that we must listen to entrepreneurs and reduce bureaucracy, for example by reducing the frequency with which small businesses are audited and by allowing audits to be conducted every three to five years, and the Isamaa party proposed suspending the second reading of Bill 516.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman Toomas Kivimägi invites Andres Sutti to speak.
Andres Sutt
AI Summary
Andres Sutt emphasized that although raising the thresholds by 25% (and the possibility of another 20% in two years) is the right direction, it is more important to build a trusting relationship between the state, citizens and entrepreneurs, and to institute, every two years, the Ministry of Finance's assessment of the same thresholds and, if necessary, proposals for changes, and to also discuss the audit obligation of a single-owner company.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman thanks and invites Juku-Kalle Raid to give his on-site speech.
Juku-Kalle Raid
Profiling Eesti 200 fraktsioonAI Summary
He recalls that Eesti 200's lead candidate and Jaak Aab said that the limits would be raised after two years, and he asks whether Andres Sutt and Jaak Aab can confirm this.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi wraps up Mart Maastik's remarks and emphasizes that this is now on behalf of the faction, and Mart must say for whom he is speaking.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik greeted the chair of the meeting and said that he had handed over, on behalf of the faction, the paper he had asked for.
Aseesimees Toomas Kivimägi
AI Summary
He noted that he did not know that the speech was made on behalf of the faction, and there could be different views within the faction.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik confirmed that I have no views different from the faction, and urged people to listen to entrepreneurs and to implement a realistic 25+20 compromise to raise the ceilings with a two-year horizon, in order to avoid improvisation in the Commission.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chair thanks and gives the floor to Urmas Reinsalu, who asks for additional time and is allotted eight minutes.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu accuses the coalition of the Reform Party, Estonia 200 and the Social Democrats of breaking promises and of instability in economic policy, which increases a crisis of trust, leads to tax hikes and chaos in the energy system, and causes entrepreneurs’ investments to be cancelled, and he calls on leaving entrepreneurs in peace from taxes and bureaucracy.
Aseesimees Toomas Kivimägi
AI Summary
Jaak Aab delivered an on-site speech.
AI Summary
Jaak Aab promises that the accounting law will reduce the administrative burden on entrepreneurs, and within two years the turnover and assets of companies could rise by 15–20 percent, which can be achieved by the Riigikogu's Economic Affairs Committee even without an initiative from the Ministry of Finance.
Aseesimees Toomas Kivimägi
AI Summary
Andres Sutt is asked to deliver a rebuttal.
Andres Sutt
AI Summary
Andres Sutt emphasizes that a word must be kept and a promise must be kept; he promises to change the cap on auditor obligations and recalls how the Bank of Estonia promised to keep the kroon's exchange rate unchanged until the introduction of the euro, and that promise held for 19 years.
Aseesimees Toomas Kivimägi
AI Summary
The essence of the speech was simply an expression of gratitude.
Andres Sutt
AI Summary
He says that everything is clear.
Aseesimees Toomas Kivimägi
AI Summary
During the rebuttal there was a timing mix-up: it was said that the rebuttal would be two minutes, but they asked Andres Sutile for one minute and apologized, saying that Andres had such a good speech that the opposition wants to listen.
Andres Sutt
AI Summary
Andres Sutt said that Ericsson will continue all business and development activities in Estonia in the same location and with the same number of employees, and the 5G network equipment produced in Estonia will remain on sale to the group, but a new factory in Estonia will not be coming at the moment, because the European demand for telecom equipment is smaller than in the United States and Asia, and the European market will have to be developed.
Aseesimees Toomas Kivimägi
AI Summary
In the speech, thanks are given and it is requested that Aivar Kokk take the floor.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Speaker Aivar Kokk said that the officials of the Economic Committee are extremely good and deserve to be trusted, but the politicians in the chamber are not trustworthy, referring to the disappearance of support for large families in 2023, to the promise that there will be no car tax, to plans for sharp increases in the land tax and to increases in municipal taxes, recalled Uber's draft bill and the Bolt taxi drivers' tax issue, and before the vote urged people to think it over and to suspend the second reading of the draft bill, because the Eesti 200 proposal aligns with the Isamaa Party's proposals and decisions are often made elsewhere.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi apologized for the lack of coherence between some remarks and noted that Mart Maastik will have a third opportunity to deliver a rebuttal, which is, fortunately, an opportunity to be precise.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maastik said that there are only two things certain in the world: death and taxes; Reformierakond will raise taxes, and if the pleas of entrepreneurs are not heard, the demise of businesses will soon follow.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi ended negotiations and announced that amendments 1–14 must be fully taken into account, while amendments 15–20 will be left unconsidered and will not be put to a vote, in accordance with section 106, paragraph 2 of the Riigikogu Rules of Procedure Act.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The speech contains only an apology.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi said that the economic committees' amendment proposals Nos. 21–23 must be fully taken into account, and he called for a vote in the Riigikogu on the Isamaa faction's draft bill No. 516 to suspend its second reading, concerning amendments to the Accounting Act.
Aseesimees Toomas Kivimägi
AI Summary
Nine Riigikogu members voted in favour of this proposal; 49 voted against and 1 abstained. This proposal did not receive support. The leading committee's proposal to conclude the second reading of Draft Bill 516 has been completed, and the second-reading process and the agenda item have been completed, and only two points remain.