2016 state budget passes 1st reading in parlt

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Estonia's 2016 state budget bill on Wednesday passed the first reading in the Riigikogu and the deadline for making amendment proposals is Nov. 4.

«The budget supports Estonia's economic growth. It raises the economic security of families with children, of pensioners and people with a lower income, and increases Estonia's defensive capacity. With the budget the government wants to realize the coalition agreement,» Finance Minister Sven Sester said before the first reading.

The Estonian government on Sept. 28 approved the draft state budget for next year, the volume of which is projected to grow by 4.2 percent on year to 8.92 billion euros. The state's receipts in 2016 are budgeted to total 8.82 billion euros which is 2.4 percent more than a year earlier. The biggest sources of revenue are going to be taxes and social tax receipts, the volume of which is to grow by 5 percent to 6.24 billion euros, it is written in the state budget draft.

Next year's tax burden is to be 33.2 percent of the gross domestic product which is 0.2 percentage points less than in 2015. The share of labor taxes will fall to 48.8 percent, the share of consumption taxes is to move up to 43.8 percent and the share of capital taxes is to decline to 7.4 percent.

Social tax receipts are to increase by 4.8 percent to 2.51 billion euros and VAT receipts by 7.4 percent to 2.01 billion euros. Excise duty receipts are to increase by 12.5 percent to 968.8 million euros -- fuel excise duty receipts are projected to grow by 19.9 percent to 499.7 million euros, alcohol excise duty receipts by 8.8 percent to 248 million euros and tobacco excise duty receipts by 2.2 percent to 186 million euros.

Personal income tax receipts are to increase by 1.9 percent to 329 million euros, while receipts of legal persons are projected to fall by 17.2 percent to 362.4 million euros as a result of a lower reference base. Tax receipts are to grow this year also by Swedbank's extraordinary dividend payment of 400 million euros.

Foreign support makes up 9.2 percent of the budget, totaling 821 million euros, of which 98 percent comes from European Union funds and programs.

Of the state budget's expenditures, social protection makes up the biggest share, totaling 34.4 percent of the budget or 3.07 billion euros. Health care expenses amount to 12.5 percent of next year's budget with 1.12 billion euros, which means that expenditures of the social field make up 46.9 percent of the budget's total expenditures.

Military defense expenses will grow to 2.07 percent of GDP or by 37.1 million euros. The total sum the state is to direct into national defense is 423.8 million euros.

State institutions' investments are planned to total 488 million euros next year. Labor and management costs are to increase by 8.9 percent or 120 million euros to 1.46 billion euros.

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