Tallinn, March 10 (NationPress) The three-party ruling coalition in Estonia came to an end on Monday, as the Reform Party and Eesti 200 opted to remain in a two-party government, leaving out the Social Democrats.

Social Democratic Party chairman Lauri Laanemets made this announcement following the coalition council meeting.

“Two words explain the dissolution of the coalition: to allow the Reform Party and Eesti 200 to implement right-leaning policies,” Laanemets stated.

He pointed to the Reform Party's declining popularity as another factor contributing to the coalition's downfall.

The Social Democrats leader described the party’s exclusion from the government as “a stab in the back.”

Later, during a press conference, Prime Minister Kristen Mihal of the Reform Party indicated that the new coalition, consisting solely of the Reform Party and Eesti 200, plans to eliminate the corporate income tax scheduled to take effect on January 1, 2026.

“Our initial action will be to reverse various tax hikes, including the corporate income tax. We will draft a bill to this effect,” Mihal declared at the press conference regarding the coalition's new structure.

“Another goal is to lessen the tax burden on individuals. The income tax was set to be charged on the first euro from next year, but that will no longer occur. While the income tax will increase to 24 percent, it will not apply from the first euro,” Mihal added, according to Xinhua news agency.

The Estonian government was officially established in July 2024 with the coalition comprising the Reform Party, Social Democratic Party, and Eesti 200.