Interpellation Regarding the Temporary Taxation of Banks' Excess Profits (No. 595)
Session: 15th Riigikogu, 3rd session, plenary sitting
Date: 2024-03-04 17:10
Total Speeches: 57
Membership: 15
Agenda Duration: 59m
AI Summaries: 57/57 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The agenda item concerned an interpellation submitted by Riigikogu members Andrei Korobeinik, Aleksei Jevgrafov, Lauri Laats, Anastassia Kovalenko-Kõlvart, and Vadim Belobrovtsev regarding the temporary taxation of banks' excess profits. Andrei Korobeinik, the representative of the petitioners, sharply criticized the government's policy, which, during a deep economic recession, imposes new taxes (VAT, car tax) on ordinary people, while banks are earning extraordinary profits resulting from the rise in Euribor, reaching nearly a billion euros annually. Korobeinik highlighted the positive example of Lithuania, where a similar temporary solidarity tax was implemented.
Prime Minister Kaja Kallas defended the government's position, emphasizing the principles of the rule of law and legal certainty, which preclude retroactive taxation. Kallas argued that banks are already contributing a solidarity amount of 520 million euros to the state budget between 2023 and 2025 through an additional advance income tax, stemming from a "shared understanding." She warned that implementing a bank tax would send a negative signal to the entire business environment and deter investment, citing the examples of Italy and Lithuania. The opposition (including Varro Vooglaid, Siim Pohlak, and Rain Epler) accused the Prime Minister of acting as the banks' advocate and asked why the government refuses to tax banks but takes 170 million euros away from families with children by eliminating the income tax exemption. The debate was tense and included accusations of demagoguery and irresponsible policy, but the government maintained its position that a bank tax is not the right solution in the interest of the sustainability of the Estonian economy.
Decisions Made 1
No decisions were made
Most Active Speaker
The most active speaker was Andrei Korobeinik (opposition), the representative of the query, who delivered the opening statement, follow-up questions, and closing remarks, sharply criticizing the government's refusal to introduce a bank tax and challenging the Prime Minister's claims regarding examples from other countries.
Esimees Lauri Hussar
AI Summary
The first item on the agenda addresses the parliamentary query submitted on January 22nd concerning the temporary taxation of banks' excess profits. The report will be presented by Riigikogu member Andrei Korobeinik.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Andrei Korobeinik thanked the chairman of the session and the prime minister, noted that the Estonian economy has been declining for over two years already and is in an exceptionally poor state compared to other European countries, and then posed a question regarding the bank tax, referencing the question put to Mr. Tšaplõgin and the answer received from Ms. Kallas—specifically the word "exceptionally..."—and finally asked, "Do I have two minutes or one?"
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar said that there are currently five minutes available and requested attention.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Andrei Korobeinik called for a constructive debate on the bank tax, noting that a total of half a billion in additional revenue is expected over the course of three years. He emphasized that the draft legislation pertains to the tax rate, not retroactive collection, and cited Lithuania, where the tax could come into force immediately upon its adoption by the Riigikogu. Furthermore, he raised questions concerning the actual magnitude of these additional revenues and how the tax mechanism would operate after the initial three-year period, once banks are permitted to increase their dividends.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar called Prime Minister Kaja Kallas to the Riigikogu rostrum to answer the interpellation.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas emphasized that banks' solidarity with the state budget must be increased through their profits, but she does not support retroactive taxation, and taxation must occur within the framework of existing laws and legal certainty, while preserving Estonia's special profit taxation regime and a six-month transition period.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanks the Madam Prime Minister, notes that he has quite a few questions, and first asks to give the floor to Aleksandr Tšaplõgin.
Aleksandr Tšaplõgin
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
He asked the Prime Minister whether the tax policy truly taxes the poor instead of the rich, while also pointing out that Estonia has the most expensive loans in the Eurozone.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kallas said that loans have become more expensive, and the Bank of Estonia has presented an analysis for improving competition, and the Ministry of Finance is trying to ease the conditions for taking out loans, but the rise in Euribor has immediately affected the situation of home loan owners and businesses.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Siim Pohlak to take the floor.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak criticizes the Prime Minister as an advocate for the banks, calling on her to stand up for the Estonian people and small businesses. He also requests clarification on the fairness of the tax policy and why the tax burden is being placed specifically on those people who are already facing difficulties.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas stated that the tax burden on banks is higher than that of other companies, and that tax changes must be implemented to cover the necessary additional expenditure for national defense. These changes will generate approximately 400 million euros in additional annual revenue, drawn from taxpayers' pockets, because the state has no money other than the money belonging to taxpayers.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar called Anastassia Kovalenko-Kõlvart up to the stage.
Anastassia Kovalenko-Kõlvart
Profiling Eesti Keskerakonna fraktsioonAI Summary
Anastassia Kovalenko-Kõlvart criticizes the car tax, arguing that it constitutes triple taxation (a VAT increase, fuel excise duty, and a separate car tax). She states that this disproportionately burdens low-income individuals and citizens who own smaller vehicles, and questions how such a measure is acceptable regarding legal certainty when legal certainty seems to be guaranteed only to banks.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kallas warns against skillful demagoguery, affirms the principle of legal certainty, and confirms that taxes will not be imposed retroactively. She emphasizes future-oriented taxes, promises increased funding for teachers and other sectors, and stresses that there must be no budget cuts or new borrowing. Furthermore, she notes that taxing banks will bring 520 million euros into the state budget—an amount greater than that generated by a tax increase or a car tax.
Esimees Lauri Hussar
AI Summary
The Chairman gives thanks and addresses a request to Mart Maastik.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik emphasizes that bank interest rates are never zero, and the system is structured around the loan interest rate plus Euribor. He recommends directing the extraordinary Euribor profit to the Bank of Estonia to finance national defense, other expenditures, and 10 million euros for teachers.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas stated that loans are not free, Euribor has been very low, which is why banks haven't had the opportunity to make a profit, and even though the solution seems simple, it won't work.
Esimees Lauri Hussar
AI Summary
The Chairman calls upon Andrei Korobeinik to speak.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
Andrei Korobeinik asks the Prime Minister what exactly caused concern in Lithuania, while emphasizing that Lithuanian banks have paid over 100 million euros in additional revenue during the third quarter, and no bank has left Lithuania.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas emphasizes that banks are providers of capital market services, and investments into the country depend directly on their conduct. She recommends looking at the examples of Lithuania and Italy, where the idea for the Italian bank tax was ultimately dropped due to its harmful impact on the economy.
Esimees Lauri Hussar
AI Summary
Lauri Hussar gives thanks and asks Varro Vooglaid to take the floor.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid questions the justification for taking approximately 170 million euros from families with children by eliminating the supplementary income tax exemption, especially when, simultaneously, there is discussion—following Lithuania's precedent—of implementing a temporary bank solidarity levy, which would collect around 150 million euros from banks that posted profits of 940 million.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas said that banks are voluntarily contributing to the state budget through a solidarity payment. Furthermore, starting in 2025, the income tax for credit institutions will increase from 14% to 18%, and beginning the same year, a uniform 22% income tax on dividends will apply, along with an additional distributed profit income tax, the total sum of which is approximately 520–530 million euros.
Lauri Laats
Profiling Eesti Keskerakonna fraktsioonAI Summary
Lauri Laats claims that the rise in VAT primarily burdens the incomes of poorer families, and that the bank tax is not proportional to banks' profits, and asks how the government views this.
Esimees Lauri Hussar
AI Summary
The Chairman called Lauri Laats up to the stage to perform.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas stated that during difficult times, it is necessary both to cut spending and find additional revenue to finance national defense and keep the budget balanced. Otherwise, we will pay colossal sums to banks in loan interest—for example, in 2027, the interest payments would exceed the entire budget of the Ministry of Culture.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar asks for Kalle Grünthal to be called to speak.
Kalle Grünthal
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Kalle Grünthal accuses the presenter of completely plagiarizing the Barbie movie, claims that she is destroying Estonia, and finally asks the public how long they will tolerate this 'Sandbox-Barbie' governance in Estonia.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas criticizes the treatment of women in the Riigikogu and expresses hope that women of future generations will cope better there than she has.
Esimees Lauri Hussar
AI Summary
The Chairman thanks [the previous speaker] and invites Henn Põlluaas to take the floor.
Henn Põlluaas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Henn Põlluaas accuses the prime minister of lying, citing the banks' extraordinary profits. He asks what percentage of taxes banks pay compared to other companies, while asserting that the income tax rate is the same for everyone.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas refers to what was stated, drawing on her background as a lawyer, and notes that the Income Tax Act makes it clear that credit institutions are subject to an advance income tax, which increases to 18%. Banks pay this, while other companies do not pay income tax on undistributed profits.
Vadim Belobrovtsev
Profiling Eesti Keskerakonna fraktsioonAI Summary
Belobrovtsev defended Kovalenko-Kõlvart and proposed a temporary bank tax aimed at taxing banks' excess profits, arguing that this would be a popular measure. He questioned why a bank tax couldn't be introduced instead of, or alongside, the proposed car tax—the only ones who would likely disagree are the banks themselves.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar invites Vadim Belobrovtsev to speak.
Peaminister Kaja Kallas
AI Summary
The government is not a popularity contest; rather, it must make the right decisions—ones that have a long-term impact on the economy and for which the taxpayer ultimately foots the bill.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler claims that Estonian banks are draining customers dry and earning extraordinary profits compared to Sweden, which primarily results from the central bank's activities. He added that the draft bill was an extraordinary tax on those profits, but the government abandoned the idea due to the difficult times.
Esimees Lauri Hussar
AI Summary
This is just a request to invite Rain Epler to the stage.
Peaminister Kaja Kallas
AI Summary
He said that he does not support the idea due to its long-term consequences, and stressed the need for legal certainty, arguing that the state taking a share when companies earn more profit deters business activity, especially since the extraordinary profits seen in 2023–2024 will decline in 2025, banks already contribute more than others, and state budget revenues are needed for essential purposes.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar informed that every Riigikogu member may ask one oral question during interpellations, but Mart Maastik’s question cannot be accepted, and the opportunity to ask a question will subsequently be given to Arvo Aller.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
According to Arvo Aller, people are asking why the government took 170 million euros from families but didn't take 150 million euros from banks, and why that money couldn't be used for the benefit of the state.
Peaminister Kaja Kallas
AI Summary
Prime Minister Kaja Kallas stated that even though family benefits in Estonia are significantly higher than in other countries, the current challenging times require cutting existing subsidies, raising taxes, and taking out loans, because the state budget is not balanced, and an additional 400 million euros must be invested in national defense.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanks the Prime Minister, announces that all questions have been dealt with, and states that before opening the debates, the rules for conducting the sitting will be discussed, which Rain Epler has asked to be clarified.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler notes that he is focusing more on the procedure and acoustics, asks whether the acoustics in the hall are working, and points out that Varro Vooglaid and Arvo Aller spoke about abolishing the income tax exemption related to children, and the prime minister touched upon child benefits.
Esimees Lauri Hussar
AI Summary
Lauri Hussar confirms that the hall's acoustics are functional, announces the commencement of the debate, and invites Andrei Korobeinik, the representative of the interpellators, to the podium.
Andrei Korobeinik
Profiling Eesti Keskerakonna fraktsioonAI Summary
In his presentation, Korobeinik stated that the bank tax is a necessary topic and needs to be implemented quickly in Estonia, noting that the Lithuanian experience demonstrates the generation of extra revenue. He simultaneously warned that policy cannot be guided by the use of fabricated examples, such as those from Italy or Latvia, and that Estonia’s claim of 500 million in additional revenue is false, as the figure actually refers to income. Furthermore, the banks’ solidarity contribution has decreased proportionally, and we must stop playing the role of the banks’ advocate and instead focus on the future of the people.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar announced that three additional minutes could still be requested during negotiations, but when submitting a formal query, time is limited to five minutes, and no extra time would be granted. He then thanked the audience and invited Mart Maastik to deliver the next address.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maastik suggests that the extraordinary profit generated by Euribor should be directed to the state or the Bank of Estonia, rather than to the banks or subjected to separate taxation, in order to cover expenses, avoid burdening consumers, and prevent the introduction of a motor vehicle tax.
Esimees Lauri Hussar
AI Summary
The Riigikogu invited Varro Vooglaid to the podium to speak.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid noted that the government prioritizes protecting the interests of banks: it refused to implement a temporary bank tax while simultaneously raising income tax and abolishing the tax exemption for children, which resulted in approximately 170 million euros being taken from families. This, he argues, demonstrates that the government is not acting in the best interests of the Estonian people.
Esimees Lauri Hussar
AI Summary
The Chairman thanked (the previous speaker) and invited Vadim Belobrovtsev to the Riigikogu rostrum next.
Vadim Belobrovtsev
Profiling Eesti Keskerakonna fraktsioonAI Summary
Vadim Belobrovtsev claims that the government's tax policy is irresponsible, criticizing the raising of VAT, income tax, and excise duties, as well as the planned car tax. He highlights the connection between the abandonment of child support and tax benefits and the resulting rise in unemployment, and emphasizes that taxing banks' excess profits—a bank tax—would be more responsible, more popular, and would generate greater revenue for the state treasury than the car tax.
Esimees Lauri Hussar
AI Summary
The Chairman thanked the audience and invited Rain Epler to the Riigikogu podium.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler criticizes EKRE's proposed bank tax, calling it a temporary, unfair, and economically detrimental form of taxation that wouldn't actually affect bank profits, would instead burden both consumers and businesses, and ultimately fail to resolve the government's underlying situation.
Esimees Lauri Hussar
AI Summary
The Speaker thanks [the assembly/previous speaker] and calls Siim Pohlak to the Riigikogu rostrum.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak accuses the Reform Party of pursuing the interests of banks and major capital, claiming that the tax policy burdens the Estonian people and small businesses while favoring large corporations. He also emphasizes the opposition's constructive idea for partially shifting the tax burden onto major capital, calling on the government to find a fair solution.
Esimees Lauri Hussar
AI Summary
The Chairman concludes the debate and the discussion of the first agenda item after the Madam Prime Minister declined to take the floor.