Prime Minister Andrus Ansip replied to the interpellation concerning compensation of the reduction of the revenues of local governments (No 1), submitted by Members of the Riigikogu Jüri Ratas, Viktor Vassiljev, Lauri Laasi, Valeri Korb, Kalev Kallo, Inara Luigas, Kadri Simson and Mihhail Stalnuhhin on 11 April.

 

The interpellators wished to know how the Government was going to compensate to local governments the loss of revenue from the tax on the land under homes.

 

In Ansip’s words, the impact of the changes amounts to the range of 17 million euro and it will be covered out of state budget funds. “The Government coalition has decided to compensate it to local governments but no concrete compensation mechanism has been developed as yet. However, the government coalition is certainly willing to compensate this loss of revenue,” the Prime Minister explained. Ansip noted that, starting from 2004, the minimum amount exempt from tax and other deductions will no longer be applied to the share of income tax received by local governments. As a result of these changes, the state has taken upon itself the impacts of the significant changes in the income tax system. In 2010, local governments received an additional amount of 150 million euro which they would not have received with the system that was in force in 2004. Budgetary supports accounted for 35% of the revenues of local governments in 2010. In 2003, this indicator was 37% which means that the share of tax revenues, the revenues received from the sale of goods, services and property and other revenues of local governments in the budget has grown in the last seven years. The Prime Minister added that, according to the Government’s action programme, the analysis of the formation of the revenue base of local governments will be completed in the second quarter of 2012.

 

The Minister of Finance Jürgen Ligi replied to two interpellations. Those were the interpellation concerning ensuring the stability of the euro area (No 3), submitted by Members of the Riigikogu Kadri Simson, Aivar Riisalu, Valeri Korb, Lauri Laasi, Yana Toom, Tarmo Tamm, Rainer Vakra, Viktor Vassiljev, Mihhail Stalnuhhin, Inara Luigas, Kalle Laanet and Kalev Kallo on 14 April, and the interpellation concerning local governments, the OECD report and land tax (No 5), submitted by Members of the Riigikogu Tarmo Tamm, Kadri Simson, Lembit Kaljuvee, Valeri Korb, Ester Tuiksoo and Priit Toobal on 21 April.

 

During the open microphone, Heimar Lenk and Mihhail Stalnuhhin took the floor.

 

The Riigikogu Press Service