Estonia to Waive Tax-Arrears Interest; Cut Social, Excise Taxes

Estonia will temporarily waive interest on tax arrears, lower employers’ social tax, and reduce excise duty on diesel, electricity, and natural gas under a broad coronavirus relief package adopted Wednesday.

• There will be no interest on tax arrears until the end of the virus-related state of emergency, according to legislation approved by parliament in a 55-9 vote. A reduced rate of 0.03% per day, from today’s 0.06% per day, will apply after the state of emergency is lifted.
• From March through May, there will be no minimum monthly base for employers’ social tax. The tax is paid by employers at a rate of 33% of salaries. The minimum monthly base for 2020 is 540 euro.
• Excise duty on diesel fuel will decrease to 372 euro per 1,000 liters, from 493 euro, which is expected to reduce the end price of diesel by 14.5 cents per liter. The reduction will mainly benefit fuel retailers, wholesalers and transport companies, both domestic and international, according to Siiri Suutre, a press officer at the Estonian Ministry of Finance.
• Consumers will see a 3.1% drop in electricity prices on reduced excise duty to 1 euro per megawatt-hour, from 4.47 euro, the government said. Excise duty on natural gas will be reduced to 40 euro per 1,000 cubic meters, from 79.14 euro.