Estonian business community: Good laws are not made in a fast-track procedure

In a letter to the Estonian prime minister, Kaja Kallas, the leaders of the Estonian Chamber of Commerce and Industry and the Estonian Employers’ Confederation stress that extremely short deadlines for giving feedback to draft laws that are extensive in their impact and effect on society violate the principles of good legislative practice; the letter comes in a wake of the new governing coalition’s plans to raise numerous taxes – none of which was debated prior to the recent general election.

To avoid a botched outcome, the entry into force of the planned changes should be postponed, the associations believe.

For example, stakeholders were given just three business days for feedback on draft legislative amendments changing tax laws, whose impact is measured in the hundreds of millions of euros a year, and two and a half business days for draft amendments to the Income Tax Act and the Social Welfare Act. In addition, they say, there are other drafts with an extensive social impact, for which there are only a few business days for giving an opinion.

“Such short deadlines do not allow for the meaningful involvement of stakeholders, that is, they constitute seeming involvement. We do not consider such a practice to be appropriate for a democratic country of rule of law,” Mait Palts, the CEO of the Estonian Chamber of Commerce and Industry, said in the letter to the prime minister Kaja Kallas, according to BNS.

Mait Palts, the CEO of the Estonian Chamber of Commerce and Industry. Photo by the Estonian Chamber of Commerce and Industry.

According to the associations, politicians have justified the rushing of the motions with the so-called six-month rule, according to which six months must be left between the adoption and implementation of tax changes.

“Adherence to the principle must not lead to haste and poor-quality decisions, as is currently the case,” said Arto Aas, the CEO of the Estonian Employers Confederation, BNS reported.

The authors of the letter say that short deadlines are also not in line with good legislative practice and the good practice of inclusion. Besides, it is incomprehensible, according to the business community, how this practice fits in with the coalition’s plan to improve the political working culture.

The cabinet ministers of the Reform Party, Estonia 200 and Social Democrats’ government in April 2023. Photo by Stenbock House.

The new coalition of the Reform Party, Estonia 200 and the Social Democrats assumed power in March, following the Estonian general election earlier in the month. The Reform Party has 37 seats, Estonia 200 has 14 and the Social Democrats nine seats in the 101-member Estonian parliament.

The parties have committed to raise income tax in Estonia from 20 per cent to 22 per cent and raise the value added tax also from 20 per cent to 22 per cent. In addition, the coalition plans to introduce a road tax. None of the taxes were debated before the election and the Social Democrats was the only party out of the three that pledged tax increases.

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