Inquiry regarding the effects of value-added tax (VAT) increases on the Ministry of Defence's budget (no. 709)
Session: 15th Riigikogu, 5th session, plenary session
Date: 2025-03-10 18:25
Participating Politicians:
Total Speeches: 8
Membership: 15
Agenda Duration: 9m
AI Summaries: 8/8 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The agenda item concerns the interpellation numbered 709, submitted on January 23, 2025, by Members of the Riigikogu Priit Sibula and Jaanus Karilaiu, regarding the impact of the VAT increase on the Ministry of Defence’s budget. The objective was to clarify how a further VAT increase affects the budget for the years 2025–2028 and which expenditure categories may increase, and which projects or resources may be lost or reduced due to the VAT increase. In addition, data were requested for each year regarding the Ministry of Defence’s budget expenditure lines, and an analysis of how tax changes may affect government policy, the price of procurement (including ammunition prices), and the implementation of investments.
The other party turned to the matter requesting that the Minister of Defence responds to the interpellation and explains the expected overall impact and whether and to what extent changes in tax-TV will affect the defence budget and future procurement plans. The discussion included both budget planning and separate, calculated impacts regarding troop formations and the potential impact of NATO financing.
Decisions Made 1
No decisions were made during the consideration of this agenda item.
Most Active Speaker
Priit Sibul, a member of the Riigikogu, was the most active speaker associated with this inquiry (the main representative in terms of the discussion). His representation context is on the political position: other (a real shaper of the core school, neither right nor left).
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi informed the Riigikogu about the second item on the agenda and introduced the inquiry submitted by Riigikogu members Priit Sibul and Jaanus Karilaiu regarding the impact of the VAT increase on the Ministry of Defence's budget (No. 709), asking for silence in the chamber and inviting Priit Sibul to speak.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul said that the inquiry will examine the impact of the value-added tax increase on the 2025–2028 budgets, including the Defence Ministry’s expenditure-line growth, which activities or resources will be left undone or cut because of VAT, and how much this will affect the price of ammunition and government policy.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi thanked the presentation for its thoroughness and said that now the Prime Minister must answer questions, but the hall burst into laughter from confusion when they heard "Prime Minister?", and apologies were offered to Defence Minister Hanno Pevkur.
Kaitseminister Hanno Pevkur
AI Summary
Defense Minister Hanno Pevkur said that the value-added tax on defense procurements is an estimated cost, kept in separate accounting and affecting the budget, but it does not change the current procurement plan, and a more precise picture will emerge when the four-year development plan is approved, as NATO funding increases the defense budget, where for every 100 million the impact is about 2 million.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi thanked the Minister of Defence, stated that the questions have ended and opened negotiations, and invited Priit Sibul to take the floor.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul asks how large the impact of the VAT change on the overall cost is, and what would be, in the context of 2025, the final total of those procurements that include VAT.
Kaitseminister Hanno Pevkur
AI Summary
Defense Minister Hanno Pevkur said that about 54–55% of the defense budget is directed toward capability development activities, and although the 2024 budget was 1.34 billion, in order to determine the exact amount separate accounts must be prepared in the Ministry of Finance and the impact of services and administrative costs must also be taken into account, not only acquisitions.
Aseesimees Toomas Kivimägi
AI Summary
The vice-chairman Toomas Kivimägi thanked the defense minister, ended the questioning, announced the opening and closing of negotiations, and ended the consideration of this agenda item.