2procentig

2procentig is a term used in Estonia to refer to the program that allows taxpayers to allocate two percent of their annual income tax to non-profit organizations and foundations. The scheme is part of the Estonian personal income tax system and has played a central role in civil society since its introduction in the 1990s. The phrase is commonly encountered in media, NGO campaigns, and donor communications as shorthand for directing tax-paid funds to charitable or cultural activities.

How it works

Taxpayers file their annual income tax return with the Estonian Tax and Customs Board and may designate up to two percent of their due tax to eligible recipients. The remaining tax liability is paid to the state and, where applicable, to local governments. Eligible recipients include registered non-profit associations and foundations, religious organizations, and certain other charitable entities that meet statutory requirements and reporting standards. The designation is made on the tax return, and the funds are transferred to the chosen organization by the tax authority.

Impact and significance

The program provides a predictable funding channel for a wide range of civil-society actors, supporting social services, culture, education, science, and community development. It enhances donor agency by enabling individuals to influence which organizations receive support, and it contributes to transparency when recipients publicly disclose how funds are used.

Criticism and reform

Debates around 2procentig focus on accessibility for smaller NGOs, transparency of fund allocation, and the administrative burden on recipients. Proposals for reform typically aim to simplify designation processes and strengthen oversight and accountability.