The government intends to redistribute the municipalities’ revenue base by planning changes in the tax system. Municipalities were given two working days to discuss and approve the new formula.

The city of Tallinn does not support the drafts of the Income Tax Act or the Social Welfare Act and Income Tax Act Amendment Act submitted by the government as a matter of urgency.

According to the Mayor of Tallinn, Mihhail Kõlvart, regional inequality is not news to anyone and did not appear recently, but has been taking place throughout the period of regained independence. "Today, the situation of some municipalities has become critical and requires operative intervention by the state,” said Kõlvart. “However, instead of allocating an additional €11,000,000 from the state budget and distributing it to weaker municipalities using an equalisation fund, the government intends to take away resources from one municipality to distribute them to another. The mathematical formula of this initiative is that 16 municipalities will lose 11 million from their revenue base – 7 million from the city of Tallinn and 4 million from the remaining 15 municipalities, which will be distributed among 63 municipalities. It seems unbelievable that in order to find €11,000,000, the state will change the revenue base and tax system of municipalities, while implementing tax changes that bring hundreds of millions to the state budget."

"The city of Tallinn also recognises the need to help weaker municipalities and supports the principle of solidarity. However, it is not correct to implement regional policy based on simple mathematics. Over the years, the state has done everything to cause life in rural areas to decline – by closing schools, libraries, cultural centres and other institutions," added Kõlvart. "Now we are surprised that the working population moves to big cities and pensioners stay in the countryside. And what is the formula of the state’s solution? Take 7 million from Tallinn's budget and 4 million from the budget of some other stronger municipalities and direct it to support various rural areas. It is clear that such ‘regional policy’ cannot be well thought out or sustainable. The state demonstrated yet again that it is unable to offer systemic solutions on its own and does not want to involve the municipalities in their development either. Therefore, Tallinn does not support such an initiative."