First Reading of the Bill to Amend the Income Tax Act (230 SE)
Session: 15th Riigikogu, 3rd sitting, plenary sitting.
Date: 2024-02-07 20:05
Participating Politicians:
Total Speeches: 38
Membership: 15
Agenda Duration: 34m
AI Summaries: 38/38 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
Today's 11th item on the agenda dealt with Draft Act 230 on amendments to the Income Tax Act, initiated by the parliamentary group of the Conservative People's Party of Estonia (EKRE). The purpose of this draft was to impose an additional tax on banks' profits derived from net interest income. Siim Pohlak, the rapporteur for the draft bill, explained that a similar tax is already in effect in Lithuania, which is expected to generate nearly 500 million euros in additional budget revenue. The justification provided was that due to the rise in Euribor, bank profits have increased exponentially, and this money has primarily flowed out of the Estonian economy into the profits of large foreign banks.
During the debate, Martin Helme highlighted that the bill had been submitted as early as June 8, 2023, but the coalition had stalled its proceedings, resulting in the state losing several hundred million euros in potential extra revenue. Andre Hanimägi, representing the Social Democrats, noted that while they have previously supported the idea of a bank solidarity tax, they currently oppose this specific bill, citing a recent agreement reached with the banks and the necessity of avoiding erratic changes to the tax system.
Decisions Made 1
The Finance Committee proposed rejecting Bill 230 during its first reading. Following the vote, the proposal was adopted with 40 votes in favor and 9 votes against. The bill was rejected and subsequently dropped from the legislative process.
Most Active Speaker
The most active speaker was Martin Helme (EKRE), who posed several questions and delivered an extended address, criticizing the government's tax policy and accusing the Riigikogu board of deliberately stalling the draft legislation. He represented a right-wing populist stance, stressing the necessity of protecting the interests of the Estonian people against foreign capital.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar announces that today's 11th agenda item concerns Draft Act 230 on amendments to the Income Tax Act, which was initiated by the EKRE faction, and asks Siim Pohlak to serve as the rapporteur.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak urged the introduction of an additional tax on banks' net interest income, arguing that this is the correct and sensible way to stimulate the economy and channel funds toward Estonian businesses and job retention, given that the money is currently flowing into the profits of large foreign banks.
Esimees Lauri Hussar
AI Summary
The Chairman thanked the audience, invited questions, and asked Martin Helme to take the floor.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme stated that the draft legislation is a tragic affair because it should have been implemented and collecting taxes last year. Instead, the coalition delayed the proceedings by ten months, meaning no more money can be collected this year. He noted that a large portion of the billion came from rising interest rates and ended up in Sweden, and he questioned how they plan to address this situation now that the moment has passed.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Due to this delay, we have lost several hundred million euros. Therefore, this is a deliberate, or even malicious, stalling tactic, and certainly malicious towards the Estonian people.
Raimond Kaljulaid
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Raimond Kaljulaid thanked the Speaker of the Riigikogu and the rapporteur, and requested that the plenary session be given an overview of the current procedure for taxing credit institutions. He stressed that although he is familiar with the system, not all members may understand it, and the bill should have been presented with a clear explanation.
Esimees Lauri Hussar
AI Summary
The Chairman thanked everyone and invited the next speaker, Raimond Kaljulaid, to the stage.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak stated that he had either mastered the segment visible on the screen or was prepared to read it aloud, and he introduced two points: the first addresses the advance payment of income tax for the Estonian branches of resident and non-resident credit institutions, and the second describes the reduction of quarterly profit and the utilization of prior losses. He added that he hoped to elevate the quality of the debate and that the questioner had gained insight as a result.
Esimees Lauri Hussar
AI Summary
The Chairman thanks [the speaker] for the comprehensive answer and calls upon Martin Helme to speak next.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme claimed that the Riigikogu Board violated the law by failing to bring the draft bill to the floor at the proper time, resulting in 150 million euros of revenue being lost to the state budget, and he asked whether the Board members should be required to compensate for the 150 million euro loss.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Following a thorough review, the role of the government coalition in these processes should be clearly assessed, as the stalling is clearly intentional and has been carried out in the interest of the banks and against the Estonian people—this is a serious question that the Riigikogu board and the coalition should be asking themselves.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar turns to Rene Kokk and asks him.
AI Summary
Rene Kokk asks why we are unwilling to tax foreign banks while simultaneously suppressing our own domestic businesses, and why we aren't discussing taxing the interest income of those banks, which are taking huge amounts of money from us.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak claims that foreign major banks are profiting here at the expense of the people, and the stifling of credit unions is disgraceful. Furthermore, he views the government as hostile and overly punitive toward Estonian businesses and citizens, arguing that this policy makes people poor.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Mart Helme to speak.
Mart Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Mart Helme stated that the board had violated its duty of care and should compensate for the damage caused to the state. He extended this demand to include the MPs belonging to the coalition and those who have defected to the coalition's side, and he inquired whether it would be possible to find consensus among all Riigikogu parties for implementing such an incentive aimed at domestic capital and the taxation of foreign banking.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak claims that finding consensus is very difficult for the Reform Party, and that they serve or represent the interests of foreign large banks. This is also evidenced by the example of credit unions, where attempts are being made to redirect the remaining market share held by local people and businesses in favor of these large banks.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar calls Valdo Randpere to speak.
Valdo Randpere
Profiling Eesti Reformierakonna fraktsioonAI Summary
Valdo Randpere asked whether a 22 million euro claim should be filed against Martin Helme, arguing that as Minister of Finance, Helme made a miscalculation that resulted in the state having to repay that amount.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak stated that the liberalization of the second pension pillar was a timely decision, which mitigated losses on deposits and savings caused by inflation, and allowed people who withdrew their funds to invest and instead generate substantial income.
Esimees Lauri Hussar
AI Summary
Speaker Lauri Hussar addresses Evelin Poolamets and says, "Please."
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Presenter Evelin Poolamets asks whether Lauri Läänemets still supports taxing banks' superprofits or if he has changed his mind, and whether he has been discussed regarding this issue.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
I have met Lauri Läänemets here in these corridors quite rarely; he is not currently a member of the Riigikogu, and we haven't discussed this topic. I hope that Mr. Kaljulaid will come forward after his address and explain why the Social Democrats suddenly abandoned their support for the additional taxation of banks.
Mart Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Mart Helme claims that the government has adopted a clear policy of taxing Estonian businesses and people to death, and he asks where the state should get more money—by taxing foreign capital into oblivion or by taxing its own taxpayers and small businesses into oblivion.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Mart Helme to speak.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak claims that large capital is undertaxed in Estonia and the tax system actually favors capital over labor, which is why foreign large capital is virtually untaxed, and Parliament should conduct a more thorough review.
Esimees Lauri Hussar
AI Summary
The presenter thanks everyone and announces that the questions have concluded, then invites Annely Akkermann, Chairman of the Riigikogu Finance Committee, to speak next.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
The Finance Committee discussed the draft bill, unanimously placed it on the agenda, and appointed the rapporteur as the lead committee; however, the government did not support the bill. A vote was then held on the third procedural decision—to propose the rejection of the draft bill—resulting in 7 votes in favor, 4 against, and 1 abstention.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar declared the discussions open, announced that the presiding officer possessed the necessary authorization, and invited Andre Hanimäe to the Riigikogu rostrum to speak on behalf of the Social Democratic Party faction.
Andre Hanimägi
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The core message of the presentation is that the substantial profits made by banks, along with changes in taxation, must be channeled into social solidarity. This is intended to improve loan accessibility and reduce interest rates nationwide, including in rural areas, especially considering the currently high interest rates and the fact that banks' corporate income tax has increased from 14% to 18% since 2018.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar is just asking for two minutes of extra time.
Andre Hanimägi
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Andre Hanimägi stated that the draft bill differs from other companies, and considering the advance income tax system and recent agreements, the state making a sudden leap from one thing to another would be a wrong step. This could prompt banks to move assets out of the country and undermine Estonia's financial stability or its crisis prevention capability. For this reason, the Social Democrats do not support the draft bill, although they wish to see the banks' financial success translated into tangible benefits for society as a whole, and the question of solidarity concerning the bank tax remains on the table.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked [the floor] and invited Martin Helme to the podium on behalf of the EKRE faction, and Helme requested three minutes of additional time.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme claims that Estonian banks earned record profits last year and that money is flowing out of Estonia. He calls for support for a bill that would tax the banks, enabling the state to improve the standard of living for its citizens, while simultaneously accusing the Reform Party of malice and criticizing the current tax policy.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar offered his thanks and announced that there were no further requests for speeches, but there was one request to take the floor, and he invited Andre Hanimägi to deliver a response statement.
Andre Hanimägi
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
I believe Martin Helme listened to my speech carefully, and my speech certainly wasn't a hosanna for taxing banks; quite the opposite, I was critical in the very areas where Helme was critical. The Social Democrats did bring the bank tax proposal to the table, but the coalition didn't support it, and EKRE's wishes weren't always realized exactly as EKRE would have liked. Therefore, one cannot claim that we have done a 180-degree turn.
Esimees Lauri Hussar
AI Summary
Speaker Lauri Hussar concluded the debates and announced that the lead committee's proposal was to reject Bill 230 at the first reading, and subsequently put the matter to a vote in the Riigikogu.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar announced that Bill 230 received 40 votes in favor, 9 against, and zero abstentions during its first reading; consequently, it was rejected and removed from the proceedings. The board's duty of care is satisfactory, and the next item on the agenda was the draft law amending the Value Added Tax Act, initiated by Rain Epler, Ants Frosh, and Siim Pohlak. However, since the presenters are not present in the chamber, this agenda item will not be opened for discussion.