TALLINN — The Estonian government is considering lowering the social security contribution tax for minimum wage earners working multiple part-time jobs.

If passed, businesses will be able to pay less tax for social contributions on positions that do not meet certain wage thresholds, which the government says could encourage foreign investment. Social contributions are a key factor for investors when comparing markets. The Ministry of Finance told Baltic Reports that it is already developing the draft of the proposal.

“We will lower the social contribution minimum for those who present with a number of part-time jobs working together and still earn in the minimum wage section,” Minister of Finance Jürgen Ligi told local media.

Ligi said that the maximum social benefits may be modified also.

“This issue certainly needs to be further addressed, since the overall tax burden is relatively high in our country,” Ligi said.

The cuts would be expected to give employment opportunities to a diverse range of people currently out of work.

“You should try to create opportunities for young people and sectors such as the unemployed,” Klas Klaas, a finance policymaker for the Estonian government, said.

Klaas pointed out that the current tax system, where 33 percent of income is calculated according to the social minimum wage or a minimum of 4,350 kroons (€278), doesn’t benefit those working multiple part-time jobs. The employee would still be taxed at the same rate even if their combined salary was lower than the minimum wage.

Though the reduction in the tax rate would reduce budget revenue in the short term, Klaas argues that it would be regained twofold by the amount of people who would choose to join the work force part time rather than sitting at home on welfare.

Part-time workers numbered around 70,000 in Estonia last year, most of them unlikely to earn the minimum wage.