New coalition in Estonia promises higher minimum wage and lower social tax

According to the Social Democratic Party (SDP), which is one of the members of the three-party alliance, the coalition plans to conclude an agreement with trade unions and employers to raise the minimum wage in four years to 45 percent of the average wage. Currently minimum wage forms 38 percent of the average wage.

Reform Party said the new government wants to lower the social tax from the current 33 percent to 32 percent.

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“This decision makes creating jobs more favourable for businesses,” said Reform Party parliamentary faction vice chairman Remo Holsmer.

The new coalition also plans to raise the income tax threshold from 154 to 205 euros per month.

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