TALLINN — Tallinn business owners are complaining that the municipal sales tax taking effect on May 1 will be costly and difficult to apply, and that city hall is not being communicative.
Tallinn plans to gather 150 million krooni (€9.6 million) from the sales tax this year, and businesses are having to cough up big bucks for the switchover. Retails companies are paying an estimated 25 million krooni (€1.6 million).
Tallinn City Enterprise Department Director Kairi Teniste said at a [private_supervisor]press conference Wednesday that applying the sales tax will cost 5 million krooni (€324,000) for the city in the first year. Eha Võrk, deputy mayor of Tallinn explained at the same press conference that the sales tax will apply to retail entrepreneurs, catering and services, but wholesale and e-commerce is not included along with those selling power, energy.
City hall is using the sales tax revenue to patch up its tight budget, which was in surplus but only through the use of loans.
Costly switch
Andres Heinver, CEO of the Selver supermarket chain told Äripäev that administering tax management requires updating information systems which costs millions of krooni plus additional labor.
“We’re afraid that we may not be ready for it on time,” said Heinver.
Heinver also said that it is still not clear to what product groups the sales tax will apply and the municipal government does not have an answer.
Siim Raie, director general of Estonian Chamber of Commerce and Industry confirms that applying the sales tax is difficult and costly.
“Above all it is related to reprogramming the cash register systems and calculating the prices,” Raie told Baltic Reports.
Tallinn does not respond
Raie said that they tried to communicate with Tallinn municipal government concerning the issue but Tallinn did not want to communicate to them.
“We wanted to get their attention on how difficult and costly applying the sales tax is, and that tere is very little time left before it takes effect, and it does not increase the competitiveness,” said Raie.
Even their legal representatives can’t get a response from city hall. Glikman & Partnerid attorney Paul Keres, who represents the chamber, tried to contact Tallinn Municipal Government but was unsuccessful.
“I do not know whether they don’t want or don’t know how to give information to whom this sales tax applies or not,” Keres told Baltic Reports. “They have problems with interpreting the regulation which was applied by themselves.”
Keres said that he does not believe that Tallinn will annul the sales tax as they need this money but it is possible that it may fail in certain court case.
When asked for a comment from Baltic Reports, Tallinn’s municipal government did not respond. [/private_supervisor] [private_subscription 1 month]press conference Wednesday that applying the sales tax will cost 5 million krooni (€324,000) for the city in the first year. Eha Võrk, deputy mayor of Tallinn explained at the same press conference that the sales tax will apply to retail entrepreneurs, catering and services, but wholesale and e-commerce is not included along with those selling power, energy.
City hall is using the sales tax revenue to patch up its tight budget, which was in surplus but only through the use of loans.
Costly switch
Andres Heinver, CEO of the Selver supermarket chain told Äripäev that administering tax management requires updating information systems which costs millions of krooni plus additional labor.
“We’re afraid that we may not be ready for it on time,” said Heinver.
Heinver also said that it is still not clear to what product groups the sales tax will apply and the municipal government does not have an answer.
Siim Raie, director general of Estonian Chamber of Commerce and Industry confirms that applying the sales tax is difficult and costly.
“Above all it is related to reprogramming the cash register systems and calculating the prices,” Raie told Baltic Reports.
Tallinn does not respond
Raie said that they tried to communicate with Tallinn municipal government concerning the issue but Tallinn did not want to communicate to them.
“We wanted to get their attention on how difficult and costly applying the sales tax is, and that tere is very little time left before it takes effect, and it does not increase the competitiveness,” said Raie.
Even their legal representatives can’t get a response from city hall. Glikman & Partnerid attorney Paul Keres, who represents the chamber, tried to contact Tallinn Municipal Government but was unsuccessful.
“I do not know whether they don’t want or don’t know how to give information to whom this sales tax applies or not,” Keres told Baltic Reports. “They have problems with interpreting the regulation which was applied by themselves.”
Keres said that he does not believe that Tallinn will annul the sales tax as they need this money but it is possible that it may fail in certain court case.
When asked for a comment from Baltic Reports, Tallinn’s municipal government did not respond. [/private_subscription 1 month] [private_subscription 4 months]press conference Wednesday that applying the sales tax will cost 5 million krooni (€324,000) for the city in the first year. Eha Võrk, deputy mayor of Tallinn explained at the same press conference that the sales tax will apply to retail entrepreneurs, catering and services, but wholesale and e-commerce is not included along with those selling power, energy.
City hall is using the sales tax revenue to patch up its tight budget, which was in surplus but only through the use of loans.
Costly switch
Andres Heinver, CEO of the Selver supermarket chain told Äripäev that administering tax management requires updating information systems which costs millions of krooni plus additional labor.
“We’re afraid that we may not be ready for it on time,” said Heinver.
Heinver also said that it is still not clear to what product groups the sales tax will apply and the municipal government does not have an answer.
Siim Raie, director general of Estonian Chamber of Commerce and Industry confirms that applying the sales tax is difficult and costly.
“Above all it is related to reprogramming the cash register systems and calculating the prices,” Raie told Baltic Reports.
Tallinn does not respond
Raie said that they tried to communicate with Tallinn municipal government concerning the issue but Tallinn did not want to communicate to them.
“We wanted to get their attention on how difficult and costly applying the sales tax is, and that tere is very little time left before it takes effect, and it does not increase the competitiveness,” said Raie.
Even their legal representatives can’t get a response from city hall. Glikman & Partnerid attorney Paul Keres, who represents the chamber, tried to contact Tallinn Municipal Government but was unsuccessful.
“I do not know whether they don’t want or don’t know how to give information to whom this sales tax applies or not,” Keres told Baltic Reports. “They have problems with interpreting the regulation which was applied by themselves.”
Keres said that he does not believe that Tallinn will annul the sales tax as they need this money but it is possible that it may fail in certain court case.
When asked for a comment from Baltic Reports, Tallinn’s municipal government did not respond. [/private_subscription 4 months] [private_subscription 1 year]press conference Wednesday that applying the sales tax will cost 5 million krooni (€324,000) for the city in the first year. Eha Võrk, deputy mayor of Tallinn explained at the same press conference that the sales tax will apply to retail entrepreneurs, catering and services, but wholesale and e-commerce is not included along with those selling power, energy.
City hall is using the sales tax revenue to patch up its tight budget, which was in surplus but only through the use of loans.
Costly switch
Andres Heinver, CEO of the Selver supermarket chain told Äripäev that administering tax management requires updating information systems which costs millions of krooni plus additional labor.
“We’re afraid that we may not be ready for it on time,” said Heinver.
Heinver also said that it is still not clear to what product groups the sales tax will apply and the municipal government does not have an answer.
Siim Raie, director general of Estonian Chamber of Commerce and Industry confirms that applying the sales tax is difficult and costly.
“Above all it is related to reprogramming the cash register systems and calculating the prices,” Raie told Baltic Reports.
Tallinn does not respond
Raie said that they tried to communicate with Tallinn municipal government concerning the issue but Tallinn did not want to communicate to them.
“We wanted to get their attention on how difficult and costly applying the sales tax is, and that tere is very little time left before it takes effect, and it does not increase the competitiveness,” said Raie.
Even their legal representatives can’t get a response from city hall. Glikman & Partnerid attorney Paul Keres, who represents the chamber, tried to contact Tallinn Municipal Government but was unsuccessful.
“I do not know whether they don’t want or don’t know how to give information to whom this sales tax applies or not,” Keres told Baltic Reports. “They have problems with interpreting the regulation which was applied by themselves.”
Keres said that he does not believe that Tallinn will annul the sales tax as they need this money but it is possible that it may fail in certain court case.
When asked for a comment from Baltic Reports, Tallinn’s municipal government did not respond. [/private_subscription 1 year]
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