The Estonian government presented a draft bill ( 25-0475 ) to the parliament proposing permanent tax increases to replace the temporary 2% security tax on 9 May 2025.
The draft bill, which amends relevant Acts, removes the planned 2% security tax on personal income and corporate profits and introduces a permanent increase in the standard personal and corporate income tax rates from 22% to 24%, effective from 2026.
Additionally, the tax rate for individuals using the simplified business account system would rise from 20% to 22%. The VAT rate which was temporarily set to increase to 24% in July 2025, if passed, will now become permanent.
Earlier, the Estonian Parliament (Riigikogu) approved a new Security Tax Act (512 SE), designed to enhance the country’s defense capabilities through increased tax measures.