Overview of the most important activities of the Chamber of Commerce in the third quarter
In the third quarter of 2022, the Chamber of Commerce published written opinions on 39 bills or other policy-making documents. The most important were the topics related to electricity. In total, the Chamber has submitted 139 written opinions to the state in three quarters.
In addition to the written appeals, there was weekly communication with various authorities, as well as with the government, in connection with the current energy crisis, as well as on other issues that require active intervention in order to ensure the stability and sustainability of the business environment. In September the Board of the Chamber of Commerce met separately with the Minister of Economy and Infrastructure, Riina Sikkut.
A meeting of the president of the Baltic Chambers and the Association of European Chambers of Commerce took place in Riga, and at the end of the quarter, in cooperation with the joint agency of EAS and Kredex and the Estonian Embassy, a visit of the Ukrainian business delegation took place in Kyiv, where opportunities for the restoration of Ukraine were sought.
We took active part in topics related to education, so we met with teachers at the discussion of teacher succession, we participated in the working group on the financing of vocational training and in the steering committee of the development plan for education and youth. We also participated in the work of the Global Estonian Cooperation Committee and the OSKA Workforce and Skills Forecasting System Coordination Committee.
We continue contributing to help Ukraine through the National Defence Promotion Foundation.
In the third quarter, we opened the Business Season at Ämari Air Base, where Toomas Luman, Chairman of the Board of the Chamber of Commerce, gave the traditional opening speech of the business season, and together with member Instar, we also recognized the most attractive employers in Estonia. We are also pleased to announce that more than 3,600 member companies are already contributing to the development of the business environment through membership of the Chamber.
The most notable topics in the third quarter were:
We proposed to the government to temporarily expand the use of specially marked diesel fuel
At the end of August, the Estonian Chamber of Commerce and Industry, together with four organisations (the Association of Construction Material Producers of Estonia, the Estonian Chamber of Agriculture and Commerce, the Estonian Food Industry Association and the Estonian Oil Association), proposed to the government to amend the Fiscal Marking of Liquid Fuel Act in such a way that specially marked diesel fuel would be allowed to be used for heating and also in production for the next two heating periods, i.e. until May 1, 2024. If the proposal is implemented, the excise duty on diesel fuel used for heating and stationary engines would be reduced from the current 37.2 cents to 2.1 cents per litre. Expanding the scope of use of specially marked diesel fuel would motivate companies to create a solution for a situation where gas is not available to all consumers or its price is very high. The change would have a positive effect especially on those companies that already have liquid fuel boilers today. At the same time, the implementation of the proposal would give companies greater investment confidence to adopt liquid fuel boilers as an alternative solution, even temporarily. At the moment, we have not received an answer to our proposal from the government. Check out the appeal
Work victory of the Chamber: donations made to help Ukraine will be exempt from income tax also next year
In March of this year, the Parliament of Estonia adopted an amendment to the law that allowed legal entities to make income tax-free donations for Ukraine until the end of 2022, if the donation is made to the following organizations: MTÜ Eesti Pagulasabi, MTÜ Mondo, Ukrainian Culture Centre, National Defence Promotion Foundation, Estonian Red Cross, Päästeliit and Rotary Club Tallinn Old Town. At the beginning of September, the Chamber of Commerce appealed to the ministry to extend the exemption for at least another year. The Ministry of Finance took our proposal into account, and at the end of September, the draft law on amending the Income Tax Act reached the Parliament of Estonia, which also includes a proposal to extend the exemption from income tax for donations made to help Ukraine until the end of 2023. It is very likely that the Parliament of Estonia will adopt this bill in the near future. Check out the proposal
We proposed to increase the tax-free compensation limit for the use of a personal passenger car
In September, the Chamber made a proposal to the Ministry of Finance to increase the tax-free limit of the compensation for the use of a personal car provided in the Income Tax Act from the current 335 euros to 479 euros per month. The current tax-free limit applies from September 1, 2014, and it no longer allows to compensate work trips in the previous volume, taking into account the recent very high inflation, including the increase in fuel prices, car and car maintenance costs. The Ministry of Finance informed us at the end of September that the tax-free limit of the compensation for the use of a personal car should be changed, but at the moment it is not possible to make this change because there is no previous analysis. Check out the proposal
The postponement of excise duties increases is positive, but further excise policy needs analysis
In August, the Ministry of Finance came up with a draft that extends until April 30, 2024 the validity of certain excise duties that were temporarily reduced during the COVID-19 crisis. The change concerns diesel fuel, heating oils, natural gas as fuel and motor fuel, liquid gas as fuel, and electricity. According to the current law, the excise duty increase on fuels and electricity would have taken place on May 1, 2023. The Chamber of Commerce supports this proposal, because in the conditions of high prices of energy carriers and rapid inflation, it is not reasonable to increase excise rates in the near future. At the same time, we emphasized in the letter sent to the ministry that the excise duty increase planned for May 1, 2024 must be reviewed once again. It is possible that in the case of rapid inflation and high prices of energy carriers, and to ensure the competitiveness of the business environment, it is necessary to postpone the excise duty increase even further into the future, to cancel excise duty increases altogether, to reduce excise duty rates, or to introduce new ones, or to expand existing excise discounts. Check out the opinion
We gave an overview of the amendments to the Employment Contracts Act that entered into force on 1 August
On August 1, several important amendments to the Employment Contracts Act entered into force. Among other things, the changes concern notifying the employee about working conditions, such as training provided by the employer, payment of taxes and paid holidays, and in addition, the probationary period was extended by the days of the employee’s illness. Our lawyers also updated the basic templates of the employment contract in the Chamber's e-shop to ensure that they comply with the changes that have entered into force. Check out the changes
Changes to the sickness benefit payment system require an additional impact analysis
The current temporary sickness benefit payment system stipulates that the employee's own responsibility for compensating sick days is up to one day, the employer's responsibility is from the second to the fifth day, and the health insurance fund's responsibility is from the sixth day of illness. In September, the Ministry of Social Affairs came up with a draft, according to which the current temporary sickness benefit regulation will continue indefinitely from 2023.
The Chamber does not support the proposal in this form, because the impact analysis contained in the explanatory letter has very important shortcomings, and based on it, it is not possible to make a considered decision whether to make the temporary distinction open-ended or not. For example, the impact analysis does not include the statistics of sickness benefits before the introduction of the temporary distinction and after the introduction of the fixed-term distinction. Without such comparison, it is difficult to say whether and what the impact of the planned change will be and whether the change will fulfil its purpose. In addition, in the impact analysis, situations where a person uses a sick day as so-called additional leave are not identified as one of the possible risks. Check out the opinion
Large companies also need supportive measures in the energy crisis
In September, the European Commission came up with proposals to mitigate high energy prices, including, for example, a proposal that member states are allowed to implement regulated electricity prices for small and medium-sized companies until the end of 2023 without asking for a state authorization. The Chamber of Commerce informed the Ministry of Economic Affairs and Communications that in addition to small and medium-sized companies, large companies also need support. In addition, we informed the ministry that a temporary solidarity contribution tax rate of 33% should not be set for energy companies. Check out the opinion
We expressed our concerns regarding the security of electricity supply
The Parliament of Estonia is in the process of a draft according to which Estonia will raise the goal of the share of renewable electricity by 2030 from the current 40 percent to 100 percent. The Chamber wanted to know from the Economic Committee of the Parliament of Estonia what would be the effect of such change on the security of Estonian electricity supply. We emphasized that it is extremely important that, in addition to the production of renewable energy, controllable production capacities are also guaranteed in Estonia, and that the state could also encourage the establishment of controllable production capacities. Check out the position
The Chamber does not support the distribution of the immigration limit by sector
At the end of September, the Ministry of the Interior came up with a draft according to which 10 residence permits would be reserved for journalists accredited by the Ministry of Foreign Affairs to work in Estonia from the remaining part of the immigration limit for 2022 (58 residence permits as of September 1), and the remaining part would be freely distributed. The Chamber informed the Ministry of the Interior that dividing the immigration limit by sector is not reasonable and necessary, because the demand of foreigners and the need of Estonian entrepreneurs for residence permits under the immigration limit is significantly greater than the immigration limit. This means that the distribution of the immigration limit cannot solve the real problem, but rather adds an artificial restriction. The Ministry of the Interior did not consider the Chamber's proposal. Check out the position
We proposed to relax the conditions of the support measure for the connection of renewable electricity production equipment
In August, the Ministry of Economy and Communications came up with a draft regulation that allows a company to apply for support for the connection of renewable electricity production equipment to the distribution or main grid in industrial areas and areas bordering it. The draft stipulates as one of the conditions that the production capacity of the renewable electricity production unit connected to the distribution or main grid with the help of support must be at least one megawatt. The Chamber of Commerce informed the ministry that the requirement of one megawatt is unreasonably strict and would start to limit receiving support. We proposed that the production capacity should be 200 kilowatts or even less, instead of one megawatt. Check out the proposal
The plan to achieve energy independence through renewable energy deserves support
The Chamber supports the European Commission's RePowerEU plan, with which the Commission wants to accelerate the introduction of renewable energy in order to also ensure faster energy independence from countries outside the European Union. According to the European Commission's proposal, by year 2030 the renewable energy goal will increase from 40% to 45% of all energy produced in the European Union. The chamber considers the raising of the goal positive, because renewable energy plays an important role in ensuring energy independence, and dealing with ensuring energy independence is extremely necessary precisely in the current difficult security situation. Check out the position
The European Commission's plan to limit greenhouse gas emissions may prove too ambitious for companies
In mid-July, the Chamber sent its views to the Ministry of the Environment regarding the European Commission's plan to limit the emission of F-gases and other ozone-depleting substances in the European Union. For example, the Commission has proposed the idea of eliminating all equipment using fluorinated greenhouse gases with a global warming potential of more than 150. Such devices include, in particular, various cooling devices. We informed the ministry that there are still a lot of such devices in Estonia and it is not reasonable to replace these devices quickly. In addition, we informed the ministry that we do not support setting a price for fluorinated greenhouse gases. In addition, we pointed out that the impact assessment prepared by the Commission does not sufficiently take into account the economic challenges arising from the current geopolitical situation. Check out the positions
We expressed our views on the idea of creating a positive credit register
At the end of July, the Ministry of Finance came up with the intention to develop a draft law on sharing credit information, the purpose of which is to create a positive credit register in Estonia. It would be a database or data exchange platform through which credit providers would have to exchange information on the existing financial obligations of private individuals. The main goal of creating a positive credit register is to reduce the over-lending of private individuals and the resulting negative effects on both borrowers and society at large. The Chamber agrees that the problem of over-lending needs to be dealt with. At the same time, we emphasized that a thorough impact analysis must be carried out before drafting the law. Firstly, more precise information would be needed as to whether the creation of a register would be the best solution to the problem of over-lending. In addition, the costs of setting up a dataset or data exchange platform should be further analysed. It is definitely worth analysing the technical side of both solutions in more detail. The principle of people's privacy must also be taken into account when making a decision. If the ministry considers that the best way to solve the problem of over-lending is to create a positive credit register, the Chamber's first preference is to do this through the creation of a national data sharing platform. Check out the opinion
The Chamber does not consider it essential to establish a unit for out-of-court settlement of financial disputes
The state wants to create an out-of-court settlement entity for disputes related to financial services at the Financial Supervision Authority, which could be addressed by financial services clients who are both natural and legal persons in order to resolve the dispute with a financial services provider. According to the draft, the decision of the new entity is legally binding on the parties, i.e., enforceable in enforcement proceedings. According to the plan, the new entity would start operating on June 1, 2023. In the Chamber's opinion, the establishment of an out-of-court financial dispute resolution entity is not essential, as it is already possible to resolve financial disputes between entrepreneurs in court, arbitration and conciliation proceedings. Check out the opinion