The Riigikogu rejected a draft Resolution and heard the replies to four interpellations.

Prime Minister Kristen Michal replied to the interpellation concerning a tax on banks (No. 673), submitted by Members of the Riigikogu Vadim Belobrovtsev, Aleksandr Tšaplõgin, Anastassia Kovalenko-Kõlvart, Lauri Laats, Vladimir Arhipov and Andrei Korobeinik.

The interpellators asked the Prime Minister what his position was regarding the fact that Estonia’s neighbouring countries Lithuania and Latvia had introduced a tax on banks, while Estonia had not.

Michal explained that Estonia had decided to tax banks with advance income tax and bank dividends with income tax for legal entities. “In total, the banks made a profit of just over EUR 1 billion, almost 1.1 billion, in 2024 and paid a total of EUR 250 million in income tax on their profits. This represents 23.5% of the profit. In 2024, the contribution of banks accounted for 26% of the receipt of the income tax of legal entities,” Prime Minister said.  

He added that the Ministry of Finance had estimated that banks would pay EUR  143 million in advance income tax by 2025. In Lithuania, at the same time, more than half as much, i.e. EUR 50-70 million, is collected with the tax on banks.

Michal noted that, with legal certainty and the predictability of state policies, it was possible to attract head offices to Estonia, which in the long run would be more beneficial than a temporary profit tax. The latest successful example is SEB, which decided to bring its head office to Estonia and branches to other Baltic countries. 

The interpellators asked whether the Prime Minister thought that the situation where the security tax was paid by individual taxpayers and not by banks was better than the situation established in Lithuania and Latvia, where it was paid by banks on their profits.

Prime Minister said that the fixed-term security tax also included the taxation of banks. The corporate component of the security tax is a 2% profit tax, and this also applies to banks. In addition, banks must pay income tax when paying dividends, which will be 22% from 2025. In addition, banks have a system of advance income tax, which increased to 18% in 2025. It was 14% previously. Receipts in the state budget are projected to total EUR 926 million in 2023–2028. The amount includes advance income tax of banks, the income tax paid on dividends and goodwill of banks to take additional extraordinary dividends.

Prime Minister also replied to interpellations concerning  the deepening of the gap between the revenues of local governments (No. 675),  the Baltic countries’ cooperation in ensuring energy security (No. 679) and the closing down of Kopli rescue station (No. 682).

A draft Resolution was rejected at the first reading

The Draft Resolution of the Riigikogu “Making a proposal to the Government of the Republic  to carry out an analysis of the impact of the use of social media by young people” (550 OE), submitted by the Estonian Centre Party Group, was intended to make a proposal to the Government to analyse the impact of the use of social media by young people.

5 members of the Riigikogu voted for the Resolution, nobody was against and there were no abstentions.  The draft Resolution needed the support of at least 51 members of the Riigikogu to be adopted as a Resolution. Thus the draft Resolution was dropped from the proceedings.

The first reading of the Draft Resolution of the Riigikogu “Making a proposal to the Government of the Republic on the establishment of a temporary solidarity tax for the banking sector” (535 OE), submitted by the Estonian Centre Party Group, was excluded from the agenda for the day on the motion of the initiators.

The sitting ended at 6.10 p.m.

Verbatim record of the sitting (in Estonian)

Video recording will be available to watch later on the Riigikogu YouTube channel.

Riigikogu Press Service
Gunnar Paal
+372 631 6351, +372 5190 2837
[email protected]
Questions: [email protected]