TALLINN, Apr 04, BNS - The government has refused to compensate the City of Tartu for the additional cost of general care services in the amount of 1.6 million euros, as it believes that the country's second largest city has sufficient options to boost its tax intake.

The City of Tartu is and will continue to be wealthier than the 80 percent of Estonia's municipalities that receive additional support from the equalization fund to balance their revenues and expenditures, Maarjo Mändmaa, secretary general of the Ministry of Social Affairs, said in a response to the Tartu city government.

The secretary general added that, according to the Ministry of Regional Affairs and Agriculture, the government has increased the autonomy of municipalities in setting the rate of the land tax.

"This year, the City of Tartu stands to receive 1.5 million euros more in land tax than in 2023. The city has the possibility to increase its land tax intake for next year alone by more than five million euros. Thus, the city has ample opportunities to increase its revenue base," Mändmaa said.

Tartu's budget strategy also shows that the city plans to use this opportunity, and is about to increase its land tax revenue to 11.1 million euros by 2028, the secretary general added.

Tallinn newsroom, +372 51 32 554, sise@bns.ee

Baltic News Service