OREANDA-NEWS. December 09, 2011. Prime Minister Andrus Ansip met European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud Algirdas Semeta in Stenbock House, briefing the commissioner on the principles of Estonian taxation policy and positions on the Commission’s tax initiatives.

Ansip said Estonia’s general stance on taxation issues remained the same: “We support better tax coordination and increasing the quality of taxation if it supports economic growth and the sustainability of public finances.”

The prime minister added that both internal market aspects and the EU’s global competitiveness should be taken into account.

Ansip said he welcomed the growth-oriented taxation aspects in the European Commission’s annual economic growth survey. In the survey, the EC recommended that countries expand their tax base and abolish exemptions, including hidden tax subsidies and exemptions that create market distortions, shift tax burden off labour, make tax collection more efficient, emphasize sustainable use of resources and monetize generation of carbon dioxide.

“Estonia is interested above all in harmonizing indirect taxes – harmonizing the tax base and abolishing exemptions,” said Ansip.

Ansip also emphasized that coordination of direct taxes was justified only in the interests of functioning of the internal market.

“Harmonizing tax rates and systems is justified when it helps to increase the competitiveness of the European Union and economic growth,” said the Prime Minister.

The latest initiatives from the EC – a common consolidated corporate tax base and a financial transaction tax – were discussed. Ansip said the key to assessing both of these initiatives was whether they would result in a rise in the competitiveness of the European Union as a whole and a positive impact on business activity.

“We support a voluntary common income tax base if it increases European Union competitiveness,” said the Prime Minister. “This must simplify business activity in an extent that justified the making of extensive changes in tax law and as long as it does not have a disproportional negative effect on the budget. The most important thing for us is that the Estonian tax system has to remain in place.”

Ansip said Estonia was prepared to discuss the financial transaction tax but added Estonia had no special interests in this field: “We are prepared to support the initiative if it increases the stability of the financial system and prevents competition distortions.”