BONJOUR L'ESTONIE

Estonian Tax Board not satisfied with VAT collection in 2013

Estonian Tax and Customs Board head Marek Helm states that the situation with collection of VAT is sad in Estonia and the few companies that VAT collection depends on have to be treated with utmost respect, LETA/Public Broadcasting reports.

Fresh statistics of the Tax Board indicated that while there were 72,000 persons liable to VAT in Estonia last year, 5,690 companies paid altogether 2.08 billion euros of VAT that formed 90% of the collected VAT, Äripäev wrote on Monday.

Helm said in national radio that the whole so-called tax gap forms 450 million euros a year in Estonia and a half of it is unpaid VAT which is the second-biggest tax that after social tax that the state budget collects.

Helm said that the problems are not new. He explained that the VAT system is complicated as companies are entitled to reclaim it from the state too but in simplified terms, there were around 70,000 companies liable to VAT, two thirds paid more VAT to the state budget than they reclaimed and one third reclaimed more than they paid.

Helm said that possible incentives could be created for the 6,000 companies on whom VAT collection depends, for example faster VAT returns.

Postimees Online wrote that Estonian Chamber of Commerce Industry director general Mait Palts said that the Tax Board's statement surprise shim. "The majority of active companies are micro-companies and a large part of them are family companies with a few employees who have a small turnover and there isn’t much to pay on that," said Palts. "Yes, there are spheres where companies complain about the problem of hiding VAT but it cannot be said that this is a problem of all spheres of activities."

Tallinn to buy 40 buses from MAN

Truck company MAN Truck & Bus AG and Estonian company Tallinn City Transport have signed an agreement in Munich on delivery of 40 passenger buses, reported LETA the press service of Tallinn City council.

A half of the ordered buses are 12-meters long, and another half – joined buses consisting of two parts with a total length of 18.75 meters. They are expected to arrive to Tallinn by the end of the year.

Four applicants took part in a tender. The agreement was concluded with an applicant offering best conditions as acknowledged by the commission. Tallinn bought 35 buses during previous two years, all of them were produced at MAN factory. The first 12-meters buses came to Estonia in May 2012, these vehicles proved to be good on Tallinn's roads. Drivers are also satisfied with their quality; therefore, more MAN buses were ordered recently.

Census : 3 women in Estonia have 18 children

The results of the 2011 Estonian population census indicated that there are three women in Estonia who have given birth to 18 children, LETA/Õhtuleht online writes.

There are also four women who have had 16 children and four women who have 15 children.

An average of 2.2 children per woman are needed for reproduction of population. Thus it can be said that in this sense these women gave birth to children for 81 more women, Statistics Estonia statistical blog states.

The referendum showed also that 76% of Estonian women at least in the age of 15 are mothers, meaning 454,855 women are mothers.

Most have 1-2 children in the family, 14% have 3 children, 3.5% have 4 children and 2% have 5 children.

Tallinn drafts €9.2 Million supplementary budget

The Tallinn City Government has presented a supplementary budget of 9.2 million euros to the city’s council for approval.

Teachers will be one of the big winners, with 2.4 million euros going to boost their wages, on average by around 10 percent, said Raepress, the city’s press service on Wednesday.

Four million euros will be diverted to roadwork and 1.5 million will go to public transport.

According to Deputy Mayor Taavi Aas, the budget extension is based on a more optimistic outlook regarding this year's revenue, with an additional 1.3 million euros from income tax, 2.6 million from land tax and 1.6 million from operating profits predicted.

If approved, as expected, Tallinn’s total budget for 2013 will come to 498 million euros. 

Free transport the key

In the last six months, Tallinn’s registered population has swelled by around ten thousand, as only official Tallinn residents are eligible for the city’s free public transport service.

Tallinn has a clear incentive in enticing people to register themselves as residents. Cities and municipalities receive a substantial cut of the income tax in Estonia based on population.

Anti-same-sex partnerships petition gathers 35,000 signatures

A petition against legal recognition for same-sex cohabiting couples in Estonia has gained 35,000 signatures, surprising even its organisers.

Varro Vooglaid, head of the Foundation for the Protection of Family and Tradition, which started the petition in March, said the figure was more than three times what they had originally hoped for. The Foundation say they aimed for 10,000 signatures to be handed in to Parliament on 14 May.

LGBT activists lodged a complaint against the petition in April, arguing it was an incitement to social hatred. Police decided against starting criminal proceedings, finding nothing compromising in the petition.

Mr Vooglaid said of the incident: “Freedom of thought and freedom of expression are fundamental values in a democratic society​​, and it’s regrettable that homosexual activists, who claim to be standing for human rights, does not understand that.”

Estonia is one of few EU member states which lacks legislation allowing civil partnerships. It, along with Bulgaria, Italy, Malta, Romania, Poland, Latvia, Lithuania, Slovakia and Greece, do not recognise registered civil partnerships from other states.

From austerity’s poster boy to Internet guru : Ilves

Please see original article (29/04) hereunder :

What an awful misleading article!

Firstly, the President of Estonia has no real power, he is basically a figurehead who doesn't create policy, rather he just rubber-stamps what is put in front of him. Thus crediting him with any economic success (leaving aside for the moment whether there is anything there worth crediting) is simply wrong.

One fact that is correct is that Estonia is the poorest country in the eurozone. Children are starving, pensioners are often toothless because they can't afford dental care - often they must choose between buying medicine or food when can't really afford either one. The unemployed have no health coverage. People are moving out of the country in droves basically becoming economic refugees. Many of those who are still "living" there are actually working outside of Estonia (most often Finland) and thus the family model of kids growing up hardly ever seeing their father is almost becoming the norm.

It seems like readers of this paper by and large don't realize the harsh reality of life in Estonia today and thus when politicians like Ilves, Ansip, Lang etc. come here to speak they are greeted with applause when they talk about how wonderful things are. Me, I just want to throw up and then hit somebody. For them, sure things are wonderful but as far as I am concerned, they have sold out their own people and belong in jail for their crimes.

The biggest money-laundering scheme in Estonia’s history discovered

The Estonian Prosecutors Office has revealed the biggest money-laundering scheme in the country’s history – Russia is also involved.

The Director General of the Security Police – Raivo Eag – has said that: “As well as organised crime-groups, there are also commercial and political groups involved in the scheme.”

Those suspected of involvement in the case are Anton Ger (according to the investigation, the leader of a criminal group), Sergey Kirilov, Sergey Golubaev, and Andrus Koch. Criminal proceedings against them will begin in autumn.

The 64 million Euro scheme had already been uncovered in January of this year but investigators are only now reporting on the sources of the money. According to the Director General of the Security Police – Raivo Eag – the perpetrators transferred money to Estonia, where it was converted into Euros or US Dollars and then taken back into Russia in suitcases.

As Postimees writes: The base of this network was a company registered in Estonia – “Ateka”. For greater security, the perpetrators occasionally set up new firms through which part of the money was transferred. However, the majority of the money passed through “Ateka”; after its closure, cash-flow into Russia decreased by five times.

Estonia lacks "Human Rights" framework : Annual report

The Estonian Human Rights Center's annual report, released Tuesday, expressed concern that there is no unified national framework for human rights.

The annual report points to whole areas of human rights which do not currently fall under the jurisdiction of any institution, reported ETV. The Human Rights Center said it will activate discussions on refugees, equal treatment, and move forward with legislation on hate crimes and the ratification of a convention for the disabled.

Emphasis is given to problems related to the status of refugees, including what the report describes as poor social assistance and insufficient language teaching.

The head of the Human Rights Center, Kari Käsper, told ERR radio that the current institutions have limited competence, lacking consistent systematic approaches and political will.

“It is the state that has the obligation of protecting human rights; has a duty to its citizens and the international community,” said Käsper.

Another major issue is the low funding, 60,000-70,000 euros annually, of the government's equality commissioner. The agency receives financing from Norway, but the Estonian government seems to think it is not a priority, Käsper said. Given the expectations and resources, Käsper said, the agency is overwhelmed.

“Can you achieve all the important goals with this money? I think not,” Käsper said.

Many issues on last year's report have been addressed, according to Käsper. These include plans to reduce the gender wage gap, a decision to move the asylum seekers center to Väike-Maarja and more stringent human trafficking laws.

Estonia surges ahead in press freedom index

Estonia rose in this year's Freedom House press freedom index, moving from the 22-24 grouping to sharing 13th to 18th place with Ireland, Monaco, New Zealand, Palau and San Marino.

The annual Freedom of the Press report, compiled by the US-based NGO, measures the level of freedom and editorial independence enjoyed by the press in 197 nations and territories.

The level of press freedom in each country is measured using three categories: legal, political and economic environments. Each category is in turn divided into seven or eight questions.

Estonia’s score in the legal and economic environments categories remained the same as in 2012, but the country improved its political environment score. According to the report, Norway and Sweden are the most press-friendly nations, followed by Belgium, Finland and the Netherlands.

Latvia is placed from 55 to 60, Lithuania is somewhat higher, at 40 to 44, while eastern neighbors Russia are at 176. Uzbekistan, North Korea and Turkmenistan bottom out the list.

The full report can be accessed here, but more detailed information on Estonia’s performance is yet to be published. Estonia has been included in the index since 2002.

Sale of mobile phones in Estonia falls by 15% in Q1

86,000 new mobile and smartphones were sold in the first quarter of the year 2013 in Estonia, which is by 15,500 less than at the same time last year, LETA/Postimees Online reports.

According to an analysis of GfK Retail and Technology, 57% of the mobile phones sold in Estonia in March 2013 were smartphones. An average mobile phone cost 166 euros in March in Estonia, Tele2 reported.

Tele2 Estonian product assortment manager Risto Taliaru said that fewer phones were sold because new phones are of higher durability and thus have to be replaced less frequently. "The average lifespan of a phone has increased to almost two years," said Taliaru.

Eesti Telekom and Microsoft Estonia top the executive pay list

According to a pay survey made by Äripäev, the highest executive monthly pay in 2011 was in Eesti Telekom and Microsoft Estonia, which paid their executives in average 10,583 euros and 6,114 euros a month.

Eesti Telekom is a holding company of seven executives who provide management services to the group’s subsidiaries EMT and Elion.

Microsoft Estonia has 17 employees and the company specializes in the sale and marketing of Microsoft products in Estonia.

- The third in the survey was Tradelex Ltd that has seven employees and specializes in wholesale of chemical products.
- Fourth and fifth were Upmas and Danske Capital AS.

The highest-earning executives in 2011 were Vladimir Volohhonski, founder of fertilizer terminal DBT who made over 70,000 euros a month and Tero Taskila, former CEO of Estonian Air who earned in average 33,000 euros a month in 2011.

No comment

Lutheran Church's criticism not justified

The project manager for the last census, Diana Beltadze, has commented on doubts voiced by a Lutheran church official regarding the census results on religion.

As reported earlier today, Urmas Viilma, chancellor of the Estonian Evangelical Lutheran Church, said this particular part of the 2011 census was manipulated to achieve a desired result. Viilma said the survey results provided ambiguous percentages and that the question was optional, with 14 percent preferring not to respond. According to him, up to 25 percent of the Estonian population is unaccounted for.

Beltadze countered that the number of over-15 inhabitants in Estonia is a definite and known quantity (1,094,564) and the 14 percent who did not respond would amount to a total of 157,216 people.  Drawing conclusions other than reluctance to reply to the question is impossible, Beltadze said.

An unknown status was recorded for 23,888 people and presumably these are people for whom other family members filled in the form, she added.

“Religion-related questions were added to the 2011 census after a request by the clergy and the format of the questions and replies was coordinated with Ministry of the Interior experts,” said Beltadze.

“Since religion is a sensitive and delicate topic, answering this question should not be mandatory. In addition it is presumed the respondent understands the content of the question, and therefore the age minimum for the question is 15 years,” she added.

An average of 1.2 mln internet purchases are made through banks in Estonia every month

Eesti Pank's statistics show that in the past 11 months, 1.2 million internet purchases have been made through Estonian banks, with a total turnover of 54 million euros, informs LETA.

Of these purchases, 4/5 were payments within Estonia made through a bank link service, accounting for 40 million euros in value. The average size of these payments was 42 euros.

Credit cards were used more over the internet for making payments for goods and services ordered from other countries. Credit card payments were made on average 235 thousand times a month for a total value of 15 million euros. Only one tenth of these payments were within Estonia. The average credit card payment was 64 euros.

Three methods are used for paying for internet purchases: card payments, internet bank payments through a bank link service, and wallet solutions like PayPal. Data from Statistics Estonia show that one in five Estonian residents used the internet for purchases in 2012. The number of purchasers using the internet in Estonia grew by 11% or 24 thousand during 2012.

Eesti Pank has been collecting and publishing statistics on internet purchases made through banks since May 2012.

Nordea in Estonia earns 12 mln euros of profit in Q1

The Nordea bank earned 12 million euros of profits in Estonia in the first quarter of the year 2013 versus 12.8 million euros at the same time last year, LETA/Postimees Online reports.

The turnover of the bank fell from 20.1 million euros in the first quarter of last year to 19.2 million euros this year.

The revenues were affected most by fall of base interest rates and inadequate loan demand, said the bank's manager Vahur Kraft.

Nordea Estonia client deposits formed nearly 1.1 million euros at the end of March, a growth of 17% in a year.

The loan portfolio of the bank reached nearly 3.1 billion euros, of which leaisng portfolio forms 575 mln euros.

The loan loss allocations formed 0.02% of the portfolio.

Floods threaten residential areas near Pärnu

Unexpectedly high water levels rose above the Sindi dam on Wednesday and have by now reached residential areas outside of Pärnu.

A local fishery near the dam was nearly completely submerged by yesterday evening and water has arrived literally at the doorsteps of the Sindi suburb of Linnuriigi, reported the Rescue Board.

Water levels have been increased by large blocks of ice that have clogged up the Pärnu river, which flows past Sindi, population 4,000.

“Locals have been informed, are at home and moving their belonging to higher places […] The biggest worry right now is disaster tourists, as they disturb local residents, damage roads and, if the situation gets out of hand, could hamper the work of rescuers,” Marko Šorin, the mayor of Sindi, told ETV on Wednesday evening.

So far rescue workers have helped five people and their pets to safety, with no injuries reported. Video is here

Estonia remains leader among Baltics in WEF's Network Readiness Index

Latvia remains 41st in the World Economic Forum's (WEF) Network Readiness Index, behind its Baltic neighbors. The index, which comprises 144 countries altogether, ranks Estonia 22nd and Lithuania 32nd, reports LETA.

At the top of the index, Finland is in first place, followed by Singapore and Sweden.

The other top ten countries in the index include the Netherlands, Norway, Switzerland, Great Britain, Denmark, the United States and Taiwan.

At the bottom of the ranking are Burundi, Sierra Leone, Chad and Haiti.

The report highlights the lack of progress in bridging the new digital divide – not only in terms of developing ICT infrastructure but also in economic and social impact. Despite rapid adoption of mobile telephony, most developing economies lag behind advanced economies due to environments that are insufficiently conducive to innovation and competitiveness. On the other hand, the report shows the progress that countries are making to fully use ICT to boost higher productivity, economic growth and quality jobs in the current economic environment. Finally, the report reveals an apparent investment threshold in ICT, skills and innovation beyond which return on investment increases significantly. Browse the report in an interactive reader. 

City of Tallinn sues central government over street repair

Tallinn City Government has gone to court, seeking to annul the government regulation on distribution of funds for maintenance of local streets and roads void, reports ERR.

Deputy Mayor of Tallinn Kalle Klandorf said that the dispute was a precedent because Tallinn is the first local government to take action against the way how the government funds street maintenance in local governments.

“Under the regulation that we have now disputed the City of Tallinn received EUR 2.9 million for street and road maintenance. We believe that this is unreasonably small amount, considering the size of Tallinn and the transit traffic that flows through  the city,” said Klandorf.

Klandorf explained that the central government was giving local governments a total of EUR 30m from the fuel excise duty that it collects although local government roads represent at least 40% of all Estonian streets and roads.

“The law requires that the state allocates 75% of the fuel excise duty proceeds for street repair, but the government hands to local governments less than 10 percent,” said Klandorf, adding that Tallinn should spend between EUR 30m and 35m a year for at least five years.

The government has accused the City of Tallinn of wasting its funds on maintaining free public transport system and creating a 20 million euro hole in its budget.

Toomas Hõbemägi

Number of Hiiumaa residents drops below 10,000

The number of residents of Hiiumaa according to the population register fell below 10,000 in the first quarter of 2013, Hiiu Leht, the newspaper of Estonia's second largest island, said.

The number declined from 10,030 as of year-end to 9,964 by Feb. 1 and to 9,919 by April 1. Those who leave mostly become residents of Tallinn. Of the 69 people who left the Hiiumaa population register in January 56 went on to become Tallinners. Of February's 35 leavers 18 did the same, just like 10 out of the 21 people who left in March.

People who registered as residents of Hiiumaa numbered 15 in January, including eight who came from Tallinn. In February 11 people and in March 10 people were registered as residents of Hiiumaa. Altogether the population number of Hiiumaa declined by 111 during the quarter.

Monika Paljasma, adviser to the county government, said the latter figure equals about the average number of leavers during a year. The people who leave mostly are young people who have studied or worked in Tallinn already for some time and now formalize their change of place of residence, mostly in order to be able to use the free public transport offered by Tallinn to registered residents of the capital city.

Estonia catching up with Finland : wishful thinking or reality?

Estonian economist Toomas Karm believes that Estonia could catch up with Finland in per capita GDP in 20 to 25 years. Below is his opinion article that was published in Äripäev last week.

“If one is more conservative than IMF, for instance, and estimates that Estonia’s economy growth will be between 3% and 4% a year and Finland’s economy will grow 1.8% a year, Estonia can catch up with Finland in per capita terms in 20 to 25 years,” said Karm.

“Although many say that talk about Estonia overtaking Finland is nothing but wishful thinking, it is not impossible, especially if we look at GDP per capita.

How long time would Estonia need and how quickly would its economy have to grow before it can catch up with richer nations?

The calculation is based on a simple formula: divide the figure 70 with the economic growth. If the economy grows in average 3% a year, it will take 23.3 years (70 divided by 3). In case of Estonia and considering the purchasing power parity, it would be equal to 40,000 USD per capita.

Tallinn to be given 3rd major cinema next year

Developers of a new shopping mall on the St. Petersburg highway in Tallinn announced today that the facility will include a seven-screen cinema as part of its 12,000-square-meter entertainment and leisure center.

The cinema, when it opens, will be Tallinn's third multiplex after the 11-screen Coca-Cola Plaza and the seven-screen Solaris Kino.

Building permits have been issued for the 130,400-square-meter shopping center, which will be adjacent a major intersection near Tallinn Airport. The complex should open in the second half of 2014, Allan Remmelkoor, a member of the board of developer Pro Kapital Grupp, told rus.err.ee.

A company statement said that the cinema's operator was a new player expanding to the Estonian market and that its name is not yet being disclosed.

In addition to the larger cinemas, Tallinn is home to two small, art-house cinemas and the 1960s-era Kino Kosmos, which is currently closed.