Estonia’s tax-free minimum will be scrapped from 2026, which is expected to stimulate Estonia’s economy, but the fall in revenue is expected to increase the budget deficit.
As of next year, a flat monthly tax-free income of €700 — equivalent to €8,400 annually — will apply to everyone. This means that people earning an average salary will have more money left in their pockets.
“As the tax hump disappears and a uniform tax-free income is introduced, people will have a bit more than €150 more per month left over, which has a positive effect,” Madis Laas, head of the income tax department at the Tax and Customs Board, told Sunday’s “Aktuaalne kaamera.”
“The president also announced that the income tax increase will be canceled, and in terms of this flat tax-free income, it means everyone is entitled to €700 per month, or €8,400 annually,” he added.
More tax rises
Other tax changes are also coming. On January 1, tobacco and alcohol excise duties will rise, and on May 1, fuel and electricity excise duties will follow.
Read more: ERR.EE
