Isamaa chair Urmas Reinsalu, said that the new government was just the same as before when it comes to tax increases. "The idea of tax increases has been pulled out of the hat, just like it was last spring, and is now being called 'creating certainty for business' and 'securing people's livelihoods.' In January they promised to help with the new tax rises. That also turned out to be another lie," Reinsalu said.

According to Reinsalu, the planned tax increases in Estonia will put it in first place in the European Union, when it comes to indirect taxes, leading to further increases in inflation and making things even more difficult for people with lower incomes.

Lauri Laats: Michal government driving its hands to the bottom of the people's pockets

"According to the latest information, income tax and VAT will be raised by two percent and a two-percent income tax will be introduced for businesses. The corporate tax measures may mean additional revenue for the state, but that will soon be reflected in higher prices, because consumers will have to cover the two percent," said Lauri Laats, chair of the Center Party's Riigikogu group.

"There is no doubt that the lives of people on low incomes will become even more difficult, because it is they who will be hit hardest by these tax increases. The government can call it everyone's contribution to the security of the country, but the fact is that as long as we don't know what the state budget is being spent on, we can't believe that the money is really going towards security," Laats added.

According to Laats, the incoming government's words do not match its actions.

"If the state budget for the coming year is €1 billion in the red, then the government should, first and foremost, set an example with austerity measures. Instead, the number of ministers is being increased, and with it the number of officials. The credibility of the new government has already suffered a serious setback even before it takes office," said Laats.

According to Laats, it is incomprehensible why there is a need for a separate post of infrastructure minister given that road construction has been reduced to a minimum and the backlog of repairs needed for existing roads is growing. "This is not statesmanship, but a desperate offer to the Social Democratic Party (SDE). There is no need to create a new ministerial seat just for the construction of a few rental properties," said Laats.

"However, Kristen Michal is to be commended for his decision to postpone the income tax reforms that favor the wealthy. It was an election promise that is too expensive for the country, and the Reform Party has finally understood that. Now we have to hope that the abolition of the so-called 'tax hump' will itself also be consigned to history and no longer be discussed," Laats added.

Helme: It's a continuation of the Kallas government on steroids!

Following the publication of Kristen Michal's coalition agreement, EKRE chair Martin Helme, called the new government a continuation of the previous one headed by Kaja Kallas, but on steroids.

Helme highlighted the new additional tax increases, in particular the increase in VAT, which he said is a tax on economic activity and stifles economic circulation. As prices will rise as a result of this, inflation levels are unlikely to be curbed, Helme said.

"It will make everything more expensive, which means there is no point in talking as if inflation is now behind us. The same inflation will be fueled by rising excise duties. The rise in VAT and excise duties will hit everyone's pockets very hard. The income tax is a tax that will reduce everyone's disposable income. This tax increase will literally make people poorer," Helme wrote on social media.

Helme also believes that raising excise duties will reignite border trade. "So now we're going back to 2019, before our government cut excise duties and ended border trade, and with it the massive damage to our state budget revenue side of 'taxes are going to Latvia'," he wrote, comparing the new coalition politicians to a person who wakes up every morning with a hole in their memory.

Helme believes that the root cause of Estonia's economic problems is the green turn. "At the same time, there is no intention to abandon the green turn, which is the cause of our country's bankruptcy," he said.

Helme said he is not taking the coalition's proposed cuts seriously.

"In fact, only one spending cut has been proposed, and even then in the form of a temporary postponement, when it was agreed to postpone the abolition of the tax hike by a year," the EKRE chair said.

"But hundreds of millions a year will continue to be sunk into Rail Baltica. Hundreds of millions a year are being sunk into the green turn –  wind, solar along with the construction of the grid and storage. Hundreds of millions more a year are being sunk into Ukraine. Hundreds of millions a year are passed on to green NGOs. Let me repeat that –  we do not have a crisis on the revenue side, we have a crisis on the expenditure side of public finances," Helme said.

"Theres is one bright moment in the background of all this. An arrogant, self-important, inadequate man was appointed finance minister. He will quickly drive everyone mad. This government won't last long," Helme concluded.

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