First Reading of the Draft Act on Amendments to the Income Tax Act (345 SE)
Session: 15th Riigikogu, 3rd sitting, plenary session
Date: 2024-01-23 14:56
Participating Politicians:
Total Speeches: 30
Membership: 15
Agenda Duration: 40m
AI Summaries: 30/30 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu debated the first reading of Bill 345 on the amendment of the Income Tax Act, initiated by the Isamaa faction. The central goal of the bill was to raise the limit of the tax-free daily allowance for drivers working in international transport from the current 50 euros (and 32 euros starting from the 16th day) to 75 euros per day throughout the entire duration of the posting. The presenter of the bill, Aivar Kokk (Isamaa), emphasized that the Estonian transport sector is losing competitiveness compared to neighboring countries (especially Lithuania and Poland), highlighting both higher excise duties and a significantly lower daily allowance, which gives neighbors an advantage of 500–600 euros per driver per month. Kokk also referred to the fact that Estonia has not yet fully transposed the directives of the European Union Mobility Package, which provide for specific norms in the road transport sector.
The lead committee, the Finance Committee, presented opposition to the bill. Committee representative Toomas Uibo (Eesti 200) explained that although the concern is understandable, prioritizing one sector creates inequality compared to other fields (such as doctors or teachers) who also go on foreign missions. The committee found that granting tax benefits to one narrow group contradicts the principle of equality, and the problem should be solved comprehensively by reviewing the daily allowances across all sectors. The Minister of Finance has promised to discuss this topic in the summer during the state budget strategy (RES) talks. Social Democrat Priit Lomp added that the bill would encourage the payment of low base salaries, which would negatively affect drivers' future social security benefits and pensions. In the final vote, the bill was rejected.
Decisions Made 1
The Riigikogu rejected Draft Act 345 on the first reading (39 votes in favor, 13 against). The bill was subsequently dropped from the legislative procedure.
Most Active Speaker
The most active participant was Aivar Kokk (Isamaa faction), who had initiated the bill and served as its rapporteur. He advocated for the bill, stressing the critical state of competitiveness for Estonian road hauliers and the necessity of aligning per diem allowances with those of neighboring countries and EU directives. Kokk also took an active role in the debate, repeatedly posing questions to the representative of the Finance Committee to highlight the significant impact that the difference in per diem rates (up to 600 euros per month) has on the sector’s ability to survive.
Aseesimees Jüri Ratas
AI Summary
The Riigikogu now moves on to the third item on the agenda, which concerns the first reading of Bill 345, the amendment of the Income Tax Act, submitted by the Isamaa faction. Riigikogu member Aivar Kokk is invited to serve as the rapporteur.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
The political party Isamaa submitted a draft bill proposing to increase the income tax-free per diem limit for drivers engaged in international road transport up to 75 euros per day for the duration of the foreign assignment. This measure aims to improve the competitiveness of Estonian carriers relative to their neighbors, ensuring equal competitive conditions and preventing the Estonian road transport sector from turning into an import industry.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas thanks the presenter, notes that there is at least one question, and asks Priit Lomp to pose the question.
Priit Lomp
AI Summary
Priit Lomp pointed out that the daily allowance covers additional expenses incurred while working abroad, but that people in equal situations must not be treated unequally when it comes to taxation. He then asked whether the initiators of the draft legislation discussed the possibility of granting an exception to one sector, such as international transport drivers, which could be contrary to the constitution.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk emphasized in his presentation that Estonia must quickly adopt the requirements of the Mobility Package concerning the regulation of international road transport. Failing to do so, carriers based in Estonia might register in Latvia or Lithuania, resulting in a deterioration of tax revenue, labor taxes, and competitive conditions compared to its neighbors.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas thanked the rapporteur, stated that there were no questions, and invited Toomas Uibo, a member of the Finance Committee, to the Riigikogu rostrum to serve as the rapporteur.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
The Finance Committee discussed the Isamaa draft bill, the objective of which is to raise the per diem for drivers on foreign assignments to 75 euros per day for the entire duration of the foreign assignment, determined that this creates inequality with other sectors and should be addressed in a broader context, decided to reject the draft bill (6 in favor, 1 against), and proposed to include it on the plenary session agenda on January 23, 2024.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas thanks the rapporteur, announces that there are questions, and calls upon Aivar Kokk to speak.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk stated that Estonia's competitiveness hinges on ensuring equal treatment with its neighbors and the proper implementation of the directive. He recalled the 2020 request for 30 million euros for the aviation sector, pointed out that the daily allowances in Latvia, Lithuania, and Finland are higher than those in Estonia, criticized the coalition's seven years of tax exemption for platform services, and called on Eesti 200 and others to review the draft bill again, because an amendment is necessary.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo said that Eesti 200 can always be relied upon, but the issue must be thoroughly discussed, and during the RES debate this summer, the figures need to be reviewed again and the impact assessed.
Aseesimees Jüri Ratas
AI Summary
Deputy Chairman Jüri Ratas invites Mart Maastik to the stage.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maastik argues that the state's duty is to create equal or better conditions for entrepreneurs, but current activities are hindering this, and calls for starting the resolution of at least one component of the issue in order to help businesses, rather than attempting to solve all of Estonia’s problems with a single piece of legislation.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo emphasizes that the principle of equality must apply first and foremost to our own people, and the per diem should not create a significant competitive advantage, because competition, according to him, is primarily an expression of a single company's own ingenuity.
Aseesimees Jüri Ratas
AI Summary
Vice-Speaker Jüri Ratas addressed Aivar Kokk and asked him to come forward to speak.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk asks how large the difference is between the monthly per diem paid to Estonian hauliers and the per diem paid to hauliers in Latvia, Lithuania, and Finland—a difference which can amount to up to 600 euros per month—and whether this is considered a small or large sum.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo pointed out that 600 euros is a large sum, and when comparing the salaries of Estonian doctors with those of Norwegian doctors, the differences are even more significant. While we must aim for higher wages, singling out one field for special focus should not be acceptable, and the issue needs to be addressed comprehensively, taking foreign competition into account.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas invites Mart Maastik to take the floor.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maastik suggested contacting the Doctors' Union and putting all per diems on an equal footing, stressing that drivers and doctors are not in the same market, and asked why the idea proposed by the Transporters' Union to standardize near-market prices was meeting resistance.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo stated that reviewing the per diems across all sectors and raising them if necessary is a good idea. However, this impacts the state budget, and the budget is currently locked. The issue will be tabled and discussed during the RES talks, given the tense financial situation.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas calls upon Andres Metsoja to speak.
Andres Metsoja
Profiling Isamaa fraktsioonAI Summary
Andres Metsoja inquired whether any calculation had been performed regarding the detrimental impact of the income tax exemption for per diem allowances within the context of the state budget. Furthermore, if the fiscal situation is indeed so constrained, he requested that the specific figure be disclosed, while simultaneously emphasizing the competitiveness of the economy and the need for budgetary balance.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo stated that such a calculation had not been performed in the committee. The draft bill is concise and sets out a 75-euro daily allowance, and while its impact on the state budget should be fully worked out, he currently does not possess that specific calculation.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas thanked the rapporteur, announced that there were no further questions, opened the debate, and invited Aivar Kokk, the representative of the Isamaa faction, to deliver a speech.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk asserts that Estonia's primary objective is to protect its people, criticizes previous tax policy errors (such as the rise in fuel excise duty and border trade), and emphasizes the equal treatment of entrepreneurs. He recalls the 2020 amendments made for the implementation of the EU Mobility Package and warns that recent decisions have led to economic decline and significant losses for Elering and in the railway sector.
Aseesimees Jüri Ratas
AI Summary
Deputy Chairman Jüri Ratas requests three minutes of time.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk argues that decisions affecting the domestic road haulage sector are resulting in daily losses, causing carriers to redirect their business to Latvia or Lithuania. Therefore, he stresses the need to improve competitive conditions and engage in greater dialogue with entrepreneurs.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas invites Priit Lomp, the representative of the Social Democratic Party faction, to the Riigikogu rostrum to speak.
Priit Lomp
AI Summary
Priit Lomp criticizes the Isamaa party’s bill concerning foreign travel per diem allowances, arguing that it merely copies the interests of one sector, fails to solve the wider problem, creates unequal treatment, and ignores fundamental taxation principles. He further emphasizes that the Social Democrats aim to adjust the per diem coverage so that it genuinely covers actual expenses and eliminates the 15-day reduction period for everyone. Lomp states that the party is simultaneously seeking a common and well-thought-out solution, and will therefore vote against the bill during the first reading.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas announced the conclusion of negotiations, confirmed the leading committee's position that Bill 345 must be rejected during the first reading, and began preparations for the vote, asking his colleagues to take a stand and cast their votes.
Aseesimees Jüri Ratas
AI Summary
The preliminary draft bill No. 345 was rejected during the first reading (39 votes in favor, 13 against, with no abstentions), and the procedure is hereby terminated; the consideration of the third item on the agenda is concluded, and today's session is adjourned.