The economic crisis of 2008-2010, which has hit the world, especially the Baltic States with their ultraliberal economy, has forced Estonia to look for solutions to overcome the depression. A low level of taxation, the policy of “thin state policy” and small public sector have influenced the macroeconomics of Estonia since it re-independence. The indirect taxes, especially consumption taxes, are dominating in Estonian taxation system. The increase in the tax burden of a little more than 2% in 2009, through the increase VAT and excises, and through the pruning of income taxation benefits, did not enlarge the state budget in the same amount. The pruning of the budget not only rapidly decreased the internal market of the state, but also decreased incomes in future periods due to the dominance of consumption taxes. The economic depression, which began in 2008 has demonstrated a weak orientation of Estonian economy, threaten its taxation system on innovation. The author considers the reason of it to be in a big percentage of consumption taxes in Estonian state budget. The amount of investments has essentially decreased than the decrease of GDP and state budget
