The city of Tallinn will increase advertising tax by 25% starting January 2012, Äripäev.ee/LETA reports.
The city was deprived of the right to collect sales tax as a local tax and thus needs to find other sources of income.
Estonian Chamber of Commerce and Industry head Mait Palts said that the advertising tax per calendar day will increase to 40 cents a square metre and in 2013, should increase to 45 cents.
Palts said that the 25% increase is definitely a big one an when advertising alcoholic beverages, even bigger since the coefficient increases too, which requires extra spending from the businesses and thus is a negative phenomenon.
Companies operating in Tallinn have complained that they learned about the tax increase just a couple of weeks ago when the city government sent the corresponding announcement and thus the tax increase comes very unexpectedly in the light of cooling down economy.
In 2009, Tallinn collected 29,099,976 EEK of advertising tax, in 2010, 27,560,700 EEK. The 2011 forecast is 1,917,349 EUR.