First Reading of the Draft Resolution of the Riigikogu "Making a Proposal to the Government of the Republic to Lower the Value Added Tax on Foodstuffs and Medicines to 5 Percent" (272 OE)
Session: 15th Riigikogu, 3rd session, plenary sitting.
Date: 2024-03-13 16:22
Participating Politicians:
Total Speeches: 61
Membership: 15
Agenda Duration: 54m
AI Summaries: 61/61 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu debate focused on the draft resolution submitted by the faction of the Conservative People's Party of Estonia (EKRE), which proposed that the Government of the Republic lower the value-added tax (VAT) on foodstuffs and medicines to 5 percent from the current 22 percent. The presenter of the bill, Martin Helme, emphasized that this was a critical measure necessary to alleviate the impact of record inflation and tax hikes on Estonian residents, especially large families and pensioners, for whom food and medicine constitute a disproportionately large share of their budget. Helme highlighted that Estonia is one of the few EU countries where a reduced rate is not applied to foodstuffs, and that the tax cut would contribute to the viability of domestic food production and the reduction of cross-border trade.
During the debate, the coalition raised questions regarding the budgetary impact and the actual benefit of the tax cut for consumers. Annely Akkermann, Chairman of the Finance Committee, expressed skepticism, referring to previous experience where price increases occurred even without a VAT hike, and suggesting that the tax cut might instead increase retailers' profits. Despite the EKRE faction's compelling argumentation that previous tax cuts (e.g., fuel excise duty) had resulted in price reductions, the bill did not find support from the coalition. In the vote, the required majority of the Riigikogu composition (51 votes) needed to adopt the resolution was not achieved.
Decisions Made 2
Draft resolution 272 of the Riigikogu, submitted by the faction of the Estonian Conservative People's Party and titled "Proposal to the Government of the Republic to reduce VAT on foodstuffs and medicines to 5 percent," was rejected because it failed to achieve the majority vote of the Riigikogu membership required for adoption (20 members voted in favor).
The next item on the agenda (draft bill 326) was dropped from proceedings because the rapporteur (Varro Vooglaid) left the chamber in protest against the requirement for 51 votes when adopting decisions that have a budgetary impact.
Most Active Speaker
The most active politician was Martin Helme (EKRE faction, right-wing/conservative), who introduced the bill and provided thorough answers to nine questions. Helme passionately defended the proposal, stressing its social and economic necessity given the rising cost of living and increasing poverty currently affecting Estonia. He dismissed the coalition's arguments regarding the budget crisis and the potential for retailers to simply pocket the profits from the tax cut, citing examples of excise duty reductions implemented by the EKRE government, which, he maintained, resulted in genuine price drops.
Aseesimees Toomas Kivimägi
AI Summary
The Riigikogu is currently debating a bill proposed by the EKRE faction, which seeks to lower the Value Added Tax on food and medicine to five percent. Martin Helme is scheduled to present the report for its first reading.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme proposed lowering the value-added tax (VAT) on food items and medicines to 5%. He justified this by pointing to high inflation and the rising cost of living, noting that the 22% VAT currently applied to food and pharmaceuticals in Estonia significantly burdens the population.
Aseesimees Toomas Kivimägi
AI Summary
The Deputy Speaker thanks [the audience/previous speaker], invites questions, and asks Evelin Poolamets to step up to the podium.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Amid rising inflation and in light of the newly implemented taxes, the question is being raised whether the proposed bill would actually help large families.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
According to Martin Helme, food prices have risen by over 40% in the past year, and lowering the VAT rate would clearly be a help for large families and pensioners.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi invited Siim Pohlak to perform.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak criticizes the abolition of the tax bracket—the coalition’s proudest and very expensive promise—and calls for comparing its budgetary and societal impacts with lowering the VAT on foodstuffs and medicines.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme claims that the budget deficit is primarily caused by the green transition and the income tax reform, and that cutting VAT on foodstuffs and medicines would bring in approximately 300–400 million euros. This measure would mainly help low-income earners and would be a smaller cost than the income tax reform itself.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi, the Deputy Chairman, addresses Varro Vooglaid with a request.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid expressed his recognition of the reasonable proposal, acknowledged the deepening hardship caused by inflation and tax increases, and worried that lowering the VAT on food might increase prices charged by businesses and reduce the tax revenue flowing to the state. He asked about both the probability and the inevitability of this occurring, and noted that the government should have the means to mitigate the risk.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme claims that the alcohol and diesel tax cuts lowered prices, the state budget remained in the black, and both tax revenue and labor taxes increased. He argues that his opponents have lied and that the Reform Party would only mess things up.
Henn Põlluaas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Henn Põlluaas points out that the recession and inflation caused by the government are driving agricultural producers and food manufacturers into bankruptcy, and food prices have risen, which affects them most directly. He asks how significant an impact lowering the VAT on food might have on producers, the sector, and the public's purchasing power.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi invited Henn Põlluaas to speak.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme claims that while the reduction of the excise duty may initially bring cheaper goods and increase competition, the bankruptcies of Estonian-owned companies will lead to a decrease in competition, increase dependence on imports, and ultimately bring in food at dumping prices, threatening both the economy and security.
Aseesimees Toomas Kivimägi
AI Summary
This is a very short request in which Toomas Kivimägi addresses Mart Helme.
Mart Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Mart Helme warns that touching pensions and increasing taxation will put older people in a difficult situation when purchasing essential medications, and if the VAT on medicines is not lowered, they may be forced to forgo purchases at certain times due to lack of funds.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi delivered a brief thank-you speech.
Mart Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
This means that certain medications will no longer be imported here, because the market has dried up.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
According to Martin Helme, the current government is placing a heavy burden on the elderly by increasing the cost of medicines and reducing treatment options, because the VAT reduction is not being implemented, and instead, a higher income tax will start being taken from pensions.
Aseesimees Toomas Kivimägi
AI Summary
The speech requests that Arvo Aller be invited to speak.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
In Arvo Aller's address, emphasis is placed on the importance of reducing the Value Added Tax (VAT) to mitigate the risk of bankruptcy among small producers. Examples are cited, specifically Pajumäe farm, Rahinge Meat Processing Plant, and Kehtna Meat Processing Plant. It is further explained that the tax is ultimately borne by the consumer—a factor that could suppress sales if consumers cannot afford the higher prices—and the forthcoming sugar tax is referenced as a precedent. Finally, the question is raised as to whether food production should be tied to ensuring national security and whether a VAT reduction is necessary to achieve this objective.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme claims that the talk of a security and war tax is actually the cost of the green transition, and that the securing of food supply and domestic production must be guaranteed. Furthermore, although the impact on the state budget might not be that significant, this draft bill requires 51 votes.
Aseesimees Toomas Kivimägi
AI Summary
The Deputy Chairman gave thanks and invited Rene Kokk to speak.
AI Summary
Rene Kokk points out that families are struggling to make ends meet because of the policies of recent governments, and that the proposed bill would offer them assistance. He also acknowledges the funding challenges faced by local governments as opportunities for extracurricular activities and sports diminish. Therefore, he urges consideration of lowering the VAT on groceries—calling it the smallest yet most crucial step—to ensure that young people and children can continue participating in sports.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme asserts that lowering the VAT on essential groceries would give families more money, but the nation's growing debt burden, poverty, and unemployment demonstrate that the current government is on the wrong path, to which he offers a helping hand.
Aseesimees Toomas Kivimägi
AI Summary
The discussion broadens, and Valdo Randpere is invited to participate.
Valdo Randpere
Profiling Eesti Reformierakonna fraktsioonAI Summary
Valdo Randpere claims that abolishing the tax bulge would mean lowering taxes for everyone who earns less than 8,000 euros per month, but its main and costly component is raising the tax-exempt minimum to 700 euros per month. He also calls on the opponent to abandon accusations of class warfare and jointly find a way to eliminate the tax bulge.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi simply expresses his thanks.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
This sentence describes a brief, friendly handshake between a militiaman and a punk.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi called for silence from the audience.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme asserts that the tax reform is fundamentally flawed, and his party voted against it, citing the system's complexity and the failure to achieve the promised objectives. He emphasizes that reducing the consumption tax on food and medicine would help the people who are struggling the most, rather than simply boosting the profits of the wealthy, given that Estonia already employs a progressive income tax.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi called Jaak Valge to speak.
Jaak Valge
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The report's author claims that the level of food prices in Estonia could rise to equal or exceed those in Finland and Sweden. This development could jeopardize border trade and the state budget, and it raises the question of how much market share Estonian producers would lose and how much tax revenue the state would forfeit.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
According to Martin Helme, cross-border trade via the Latvian border is growing rapidly, leading to a drop in tax revenue, including VAT and excise duties, and costing the state budget approximately 300 million euros. Consequently, tax policy must be structured so that Estonians shop in Estonia and the money remains here.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi calls upon Kalle Grünthal to speak.
Kalle Grünthal
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Kalle Grünthal said that the adoption of Riigikogu decisions takes place by a majority of affirmative votes, which is confirmed by the annotated edition of the constitution, and whose purpose is to ensure the functionality of the plenary session and the participation of members in the sittings.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme criticized the requirement for 51 votes, which would force coalition MPs to press the button and reveal their position. He described this as a cunning trick, emphasizing that there must be a higher threshold for influencing the state budget or amending a law—similar to a vote of no confidence against ministers—and that decisions in the Riigikogu should not be made with just two votes in favor and one against.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi calls upon Kert Kingo to speak.
Kert Kingo
AI Summary
Kert Kingo recalls the period of mandatory vaccination, claims that many people suffered permanent health damage and increased medical costs as a result, and calls on the state to take responsibility and lower the prices of medicines.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme claims that hundreds of millions were spent on procuring vaccine stocks, a large portion of which was later disposed of, all in the name of making them "freely" available. He asserts that health damages and excess mortality in Estonia are statistically proven, doctors are speaking about side effects, and he emphasizes the need to take responsibility and provide assistance to those who have suffered negative consequences.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi concludes the Q&A session, expresses his thanks, and requests that Annely Akkermann, the Chair of the Finance Committee, be invited to the Riigikogu podium to present the positions and decisions of the responsible committee.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
The Finance Committee discussed the EKRE faction’s proposal to reduce the VAT on food and pharmaceuticals to 5 percent; EKRE had submitted 50 alternative amendments, which they withdrew on February 22nd, and the committee decided on March 4th to place the draft bill on the plenary session agenda for March 12th and to appoint the current speaker as the representative of the lead committee.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi thanked [the previous speaker] and called upon Evelin Poolamets to ask her question.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Evelin Poolamets asks if the commission discussed why Estonia isn't following the example of other European countries regarding the introduction of a vehicle tax and the lowering of VAT on food items.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
The VAT on food is currently under discussion: countries are implementing various solutions, and attempts are being made to harmonize the system, using Latvia's example. However, the significant rise in food prices and the growth in retail trade profits demonstrate that VAT is only one factor.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi called Arvo Aller to the stage.
Arvo Aller
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Arvo Aller noted that Latvia's VAT increase has led to farmers' protests and asked whether the consumer must bear the cost of this rise, emphasizing that the goal is to make the price more favorable for the consumer by lowering the VAT.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
Annely Akkermann argues that last year clearly demonstrated that lowering the value-added tax (VAT) does not reduce consumer prices, since prices depend on the agreement between the buyer and the seller, and price increases boost sellers' profits.
Aseesimees Toomas Kivimägi
AI Summary
Vice-Chairman Toomas Kivimägi invited Siim Pohlak to speak.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak raises the question of why the state taxes essential goods such as food and medicine, taking almost a quarter of their price, even though the price is determined by an agreement between the buyer and the seller, and asks for an explanation of the logic behind this.
Annely Akkermann
Profiling Eesti Reformierakonna fraktsioonAI Summary
The government collects taxes to cover expenses and provide services such as police, courts, schools, and healthcare.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi offered his thanks, announced that there were no further questions, and opened the floor for debate, addressing his colleague Siim Pohlak on behalf of the EKRE faction.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak claims that the Reform Party government’s tax policy is deepening the economic crisis, and that lowering the VAT on foodstuffs and medicines would be a correct and effective relief measure, which could be financed by reallocating the state budget and reducing bureaucracy.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi requests one more minute.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak criticizes the justifications for abandoning the VAT reduction on food and medicines as poor, arguing that the money will remain with the merchants and will not reach consumers or producers, and calls for supporting the EKRE draft bill so that the tax cut is reflected in prices and benefits the people of Estonia.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi thanks everyone, concludes the requests to speak, and announces that the vote on the draft legislation is approaching. Before the vote, he asks his colleague Kalle Grünthal to address a question to the Presiding Officer.
Kalle Grünthal
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
He notes that the quorum call sound system is broken and only two members of the coalition are present, which is why the equipment should be fixed before the vote.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi stated that adopting the decision requires a majority vote of the Riigikogu membership, and he put to the final vote Riigikogu draft resolution 272, submitted by the faction of the Conservative People's Party of Estonia, which aims to lower the value-added tax on foodstuffs and medicines to 5 percent.
Aseesimees Toomas Kivimägi
AI Summary
20 members of the Riigikogu supported the motion, 0 were against, and there were 0 abstentions; Bill 272 has been rejected and failed to gain the necessary support; the second item on the agenda is the first reading of Bill 326 from the EKRE faction, the purpose of which is to call upon the Government of the Republic to implement effective measures to protect minors from exposure to pornography; before I invite colleagues Varro Vooglaid and Martin Helme to the Riigikogu podium, a question will be addressed to the Chair of the session.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme sadly announced that the draft bill cannot proceed due to the rapporteur’s departure and the 51-vote threshold, meaning it will be dropped from the agenda, but the debate over that threshold will continue on Monday.
Aseesimees Toomas Kivimägi
AI Summary
This is truly regrettable, but if the rapporteur is not in the hall, or has just left, I cannot open the proceedings for the agenda item, and therefore, discussion is impossible.