Estonia should abolish its current zero-tax corporate tax on reinvested profits, says Indrek Kasela, fund manager of investment company Amber Trust. In an interview to Ärileht, Kasela said that Estonia could still successfully compete with neighbouring countries if its corporate tax rate would be lower than 13% as in Russia.
“The current system was good 10 or 15 years ago, but now it is past its due date and only serves the interests of large foreign corporations, banks and telecom giants”. He added that Estonians are forgetting that while the Estonian pension system collects tens of millions of euros every year, foreign-owned banks are siphoning this money away from Estonia instead of investing it in Estonia.
“We have about 640,000 people who have invested in second pillar pension fund. It is crazy and unsafe to invest these funds in some far market such as Bulgaria at the time when we are borrowing money from abroad.
Kasela said that if Estonia listed some of its larger state enterprises such as Eesti Energia, it could activate the local stock market and convince fund managers to re-invest the funds in Estonia.