It seems that Estonia is well on the way to becoming a shining example of robust capitalist virtues… and high tax Finland is concerned it will turn into a tax haven (article will only be available on-line for a short time for non-Baltic Times subscribers).
In Finland, corporate income tax is 29 percent while in Estonia it is 26 percent and there is no tax on reinvested corporate profits. The personal income tax rate is progressive in Finland and may reach up to 60 percent; in Estonia it is set at 26 percent.
“Estonia certainly wants to preserve the comparatively low taxation level for a long time,” Kallas said. “I suggest other countries move toward decreasing taxes rather than pressuring others to increase theirs.”
But it is hard for Finland to decrease the tax rate while trying to uphold a social-welfare system, he said, and so it is difficult for the country to compete internationally on low tax levels. He suggested that the EU set tax standards to avoid harmful competition between member states.
Viialained said that taxation was an internal matter for Estonia, but EU negotiators should have considered the issue more carefully.
“When Estonia is a member of the same union, then the common internal market is not totally (the country’s) own business any more,” he said. “That is why I hope Estonians understand our criticism.
Of course they understand EU criticism, a simpleton could understand it! The political classes in places like Finland (and France and Germany) do not want the owners of capital to have access to less kleptocratic taxation within the EU as that would endanger the system of pork barrel and kick backs they depend on for their perks. Oh if only more former communist nations would follow Estonia’s brave example and turn their back on the toxic social democratic model of the European Union.