At the start of the current academic year, the Tax and Customs Board informed private hobby schools and children's camp organizers — who had generally been exempt from value-added tax (VAT) — that they would now be required to begin paying it.

In response, the Estonian Association of Camp Organizers and the Association of Private Hobby Schools approached the Ministry of Education in October, arguing that the added tax burden would make camps and hobby education less accessible to children and youth.

The Ministry of Education and Research agrees with the associations and has informed Finance Minister Jürgen Ligi (Reform) that services provided to children and youth by camps and private hobby schools should remain VAT-exempt.

Education Minister Kristina Kallas (Eesti 200) emphasized that these are largely non-commercial, voluntary educational activities that complement formal education and contribute to young people's development.

"Youth camps operating under the Youth Work Act and private hobby schools operating under the Hobby School Act and the Private Schools Act are institutions that provide non-formal education and are an integral part of the overall education system," Kallas said.

She stressed that from the ministry's perspective, ensuring access to camps and hobby education for children and youth is crucial.

"The Foresight Center's short report on access to hobby education highlights a clear correlation between parental income and children's access to extracurricular learning. Hobby education is more accessible to children of wealthier and more highly educated parents," the minister noted. "If service providers are burdened with VAT, a service that is already expensive may become even more inaccessible to families. We want to avoid that outcome."

Kallas pointed to a provision in the European Union's VAT Directive, which allows for VAT exemptions on services directly related to the education of children and youth — whether school, university, vocational or retraining — when provided by public bodies or organizations with similar aims.

"There needs to be legal clarity and confidence for camp organizers and private hobby schools regarding how VAT will apply to these services," she said.

The Ministry of Education has submitted nine questions to the Ministry of Finance on the matter, including one asking why municipal and private hobby schools are being treated differently under VAT rules, even though their legal foundations and educational goals are the same.

The ministry also wants to know whether the current practice could be restructured without changing the law, so that all hobby education services — regardless of ownership — would remain VAT-exempt.

Kallas stated that if, in the Finance Ministry's view, changes in administrative practice are not possible without amending the VAT Act, then the Ministry of Education considers changes to the legislation necessary.

In the previous academic year, nearly 71,000 children and young people were enrolled in private hobby schools and 30,000 have participated in government-supported camps or camp projects this year.

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