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The Minister of Regional Affairs Siim Valmar Kiisler replied to the interpellation concerning compensation for exemption of residential land from land tax (No 178), submitted by Members of the Riigikogu Andres Anvelt, Eiki Nestor, Helmen Kütt, Indrek Saar, Jaak Allik, Jaan Õunapuu, Jevgeni Ossinovski, Kajar Lember, Kalev Kotkas, Kalvi Kõva, Mart Meri, Neeme Suur, Rannar Vassiljev, Rein Randver and Sven Mikser on 6 June. 

According to Kiisler’s explanations, to compensate for the exemption from the tax on the land under homes, the Government has opted to increase the proportion of the income tax received by local governments because the income tax is the best way to compensate for the reduction of revenues, as it is simple and at the same time it does not bring along further bureaucracy. “In terms of the total volume, the increasing of the proportion of the income tax will after all guarantee equal treatment of local governments and, for local governments who receive support from the equalisation fund, the distribution formula will correct the possible deficit of their revenue base caused by the tax exemption,” the Minister of Regional Affairs noted. In his words, it also has to be taken into account that, in summary, these are after all relatively marginal amounts as regards the majority of local governments and they do not affect significantly the capacity of local governments, individually or on the whole. The 13 million euro that we are speaking about accounts for less than 1% of the total revenue of local governments in 2013. Kiisler noted that prospectively the compensation for land tax exemption will not have a negative impact on the autonomy of the revenue base of local governments because one type of tax revenue will be replaced with another. “The compensation is not in conflict with the Government’s action programme because the revenue base of local governments will increase over the years. The expected maximum total impact of the land tax exemption is ca 13.3 million euro. The income tax will grow in the coming years and, for local governments, this means an additional increase of income,” the Minister of Regional Affairs explained. 

Kiisler also replied to the interpellation concerning a suspicion of corruption in connection with construction works without building permits (No 173), submitted by members of the Riigikogu Ester Tuiksoo, Lauri Laasi, Mailis Reps, Mihhail Stalnuhhin, Peeter Võsa, Valeri Korb, Viktor Vassiljev and Vladimir Velman on 30 May. 

During the open microphone, Inara Luigas took the floor. 

The Riigikogu Press Service