From today, VAT in Estonia will rise to 24%. This means that everyday goods and services - such as food, medicines, heating and hygiene products - will become more expensive. The Confederation of Trade Unions believes that the tax increase will put more pressure on workers' livelihoods and deepen economic inequalities in society.

"A worker's wallet is getting thinner while life is getting more expensive. The hardest hit by sales and other tax increases will be those who are already struggling. I'm talking about low-paid workers, single parents and people with disabilities," said Kaia Vask, head of the Estonian Trade Union Confederation. "Many of them are already living in relative poverty, and every new price increase means even more deprivation of basic goods."

 
A recent Praxis analysis confirms that tax rises and budget cuts are reducing household incomes and are particularly damaging for single female parents and the elderly. "It is worrying that there are still a large number of elderly people working in Estonia whose pensions are not enough to live on. This is not ageing with dignity," added Vask.

Trade unions believe that tax policy must be fair and take into account people's real means of subsistence. "Tax-free income must grow at least as fast as prices. We also need to increase the subsistence allowance and other social assistance measures to help those who are most vulnerable," said Vask.

 
Crisis of confidence between government and trade unions deepens, workers' opinions ignored

Trade unions are also increasingly concerned about the way in which decisions on working life have been taken in recent months. Workers' representatives have not been involved, changes have been made in haste and often only in the interests of employers.
 
"There is a clear crisis of confidence between the government and the trade unions. Workers' rights must not be put second to employers' wishes," Vask stressed. "Such an approach undermines social balance and increases tensions in society."

The trade unions are particularly critical of the draft Employment Contracts Act, which passed its first reading in the Riigikogu on 11 June, and whose amendments, according to the trade unions, reduce the influence of collective agreements in shaping working time and pay conditions. "It is a question of values. Whose voice counts - only the employers' or theirs and the employees' equally? Workers need to be involved in decisions from the outset, only then will it be possible to reach fair and balanced decisions," stressed Vask.
 
 
Trade unions call for a return to meaningful social dialogue

The Confederation calls on the government to restore a meaningful tripartite social dialogue between the state, employers and trade unions. This is the only way to develop a labour policy that takes into account the interests of society as a whole.

"People must not be left alone under rising prices and a growing tax burden. Workers need to know that the state will stand by their side and make decisions that will help them to cope in difficult times," said Vask. "Fair policies mean listening, inclusion and support - not just slogans, but real, workable solutions to cope with tax rises and inflation."

Reference. Analysis of the impact of national tax increases and budget cuts on vulnerable groups. Tallinn: Praxis think tank.