Estonia Moves to Reorganize Taxes to Aid Defense, Security Needs

Estonia seeks to maintain a higher standard value-added tax rate indefinitely, increase income taxes, and cancel an administratively burdensome security tax, under a tax reorganization the government adopted Thursday.

The proposal, which still requires parliamentary approval, aims to maintain the relative simplicity of the country’s tax system while providing for higher defense and security needs amid the ongoing Russia-Ukraine conflict.

The increase in the standard VAT rate to 24%, from the current 22%, was originally limited to between July 1, 2025, and the end of 2028.

The proposal now is to maintain it indefinitely “because geopolitical developments no ...