Estonia's Opposition Isamaa Party Pledges to Cut Food VAT to 13%

Estonia's opposition party Isamaa announced at a meeting of its council of delegates in Tallinn on Saturday that it wants to substantially reduce value-added tax (VAT) on food. The party promises that if it wins the parliamentary (Riigikogu) election in March next year, the cut will take effect by the middle of next year. The food VAT rate would fall from 24% to 13%.

What the party is promising

Isamaa was the most popular party in Estonia for years, but has recently been slowly losing ground to the Centre Party and the Social Democrats. At the meeting, party members discussed preparations for the coming election and presented several pledges. Some are quite specific, such as abolishing the Ministry of Climate and preserving oil shale energy. Others are aimed at a wider audience: besides scrapping the car tax, the party now proposes lowering VAT on food.

Party chairman Urmas Reinsalu said that, through the efforts of the Reform Party, Eesti 200 and the Social Democrats, Estonia has become the European champion in the level of indirect taxes. Isamaa therefore believes VAT on a range of basic foods should be cut from 1 July next year. This would require trimming state spending and adopting a negative state budget after the spring elections.

Political scientist's view

Political scientist Tõnis Lehtp argues that it is time for Isamaa to adjust a tactic built on blanket criticism of the government. In his words, the party's electorate has grown considerably in recent years, but largely thanks to people united less by interest in the party's ideas than by dissatisfaction with the current coalition. This is a very heterogeneous group, and keeping such voters is hard. Putting forward specific ideas risks driving away some current supporters. The food VAT pledge sounds attractive to consumers, but the idea has long been promoted by the Centre Party and the Social Democrats, so it is unlikely to have a dramatic effect on Isamaa's ratings. New ideas and proposals are needed, he said.

The election campaign

Isamaa intends to fight for victory in March. Candidate lists are already being compiled, and contracts for advertising channels have been signed. By the end of November, all regional branches must submit their list proposals, which the party board and council of delegates will then approve. Secretary General Andres Metsoja said people are not inclined to think about elections before Christmas, so the campaign will start in the new year. The fact that some rivals have already launched campaigns will not make the party revise its plans.