The government approved the bill submitted by Finance Minister Keit Pentus-Rosimannus to increase the tax-free income from 500 euros to 654 euros per month in the coming year.
"This is the first part of the decisions that will support the coping of people with lower incomes in difficult times. As a result, a person earning up to 1,200 euros will have 370 euros more per year," explained the Minister of Finance.
She added that at the beginning of next year, the average old-age pension will become tax-free, both for working and for pensioners who stay home from work.
The calculation of tax-free income is based on the income of the calendar year, and people earning up to 14,400 euros per year can deduct 7,848 euros of tax-free income from their taxable income.
As a result of the change, approximately 368,000 people will receive nearly 100 million euros more per year.