During state budget negotiations, Reform Party politicians have publicly supported scrapping next year's planned two-percentage-point income tax hike. However, they have also argued that doing so would mean less money for the state budget. Toomas Luman, who supports canceling the tax hike, says that logic doesn't necessarily hold.

"The reason I say we should cancel the two-point income tax increase is this: if you look at Estonians' ability to save, it was between 10 and 13 percent of income from 2018 to 2020. Now it's around 3 percent, which means the average Estonian household can no longer afford to save. If we cancel the income tax hike, the money won't go into savings — retailers are saying the same thing: everyone is chasing discounts. That means this saved income tax will go straight into consumption, into exactly what [Finance Minister] Jürgen Ligi (Reform) says we don't have enough of. This would help address that," Luman said.

Luman said he was puzzled by some opinion pieces that acknowledge problems in the economy and household finances, but still point to positive indicators — like retail growth.

"So I called a few retailers and found out that yes, in monetary terms there's some growth. But when you factor in price increases, actual sales volumes are still in sharp decline. If inflation has been 50 percent and incomes have risen by 20 percent, then people can afford to buy less than before. So it's no surprise consumer confidence is low," he said.

Luman noted that Estonians' purchasing power is currently lower than it was in 2022, before the war in Ukraine began.

"Purchasing power is what lets me consume. And if I don't have that power, is it because I'm whining or is it because my employer simply can't afford to pay me more — while prices in stores have gone up?" he said.

Asked whether it is the government's responsibility to give the economy a boost, Luman said it's not solely their job, but politicians should be more willing to listen to advice from entrepreneurs.

"Of course, this is something business organizations also need to discuss. But it feels like all the ideas we've put forward — ideas we believe are logical — are being rejected. And I can't say why that is," he said.

As for cutting VAT on food, Luman said the issue is more complex and the real answers can only come from practice.

"What I proposed involves two things: if 100,000 people have signed a petition, it's politically foolish to ignore that. The debate is that one side says cutting VAT won't help, the other says it will. Neither has solid scientific proof. The argument just goes in circles unless we do something. I've suggested we cut VAT at least on basic foodstuffs and see what happens. First, the people who signed the petition won't feel ignored, and second, we'll find out which side was right," Luman said.

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