Estonia's January tax receipts climb 10.7 pct on year

Photo: Toomas Huik

Tax receipts of the Estonian state budget in January totaled 495 million euros, 10.7 percent more than in January 2012, the Ministry of Finance said.

The biggest rates of increase were recorded in alcohol excise duty and corporate income tax at respectively 45.3 percent and 24.4 percent. The increase in receipts of social tax was somewhat lower than expected, the ministry said.

Of social tax 182.4 million euros was received, 6.1 percent more than a year ago. The rate of increase in wage payouts was 7 percent, meaning that the rate of increase in year-end bonuses was not significantly higher than the average pay rise.

The fastest increase in wage costs was posted by the construction sector, where payments in January were 10.3 percent bigger than in January 2012.

The solid increase in receipts of the corporate income tax was linked primarily to the payment of owner's income by state-owned companies, the ministry said.

The state forest managerment center RMK paid its dividend into the state budget in December and income tax on the dividend arrived in the budget in January. Compared with 2011, dividends of RMK increased from 21 million to 36 million euros and the income tax paid on them was significantly bigger as a result.

Even though the public sector made a big contribution to the increase in receipts, it only accounted for a third of the receipts of corporate income tax. Tax paid on dividends of the private sector meanwhile grew 11.4 percent year on year.

In receipts of the alcohol excise duty and tobacco excise duty increases of respectively 45.3 percent and 8.1 percent took place, which is attributable to the building up of stocks by companies and individuals ahead of the duty hike at the beginning of the new year.

The reason for the slower increase in receipts of tobacco excise duty is the higher reference base from 2012, as the tax rate was moved up and related stockpiles formed also a year ago. If in volume terms the stocks accumulated equaled about half of a month's consumption in both cases, in the case of alcohol mostly strong and consequently more expensive alcohol was stocked whereas in tobacco products almost half of the cigarettes stocked were of the lowest end of the price scale.

VAT receipts increased 10.2 percent, yet due to bigger than usual refunds in December a faster increase could be expected. In December the retail sector grew 8.5 percent according to figures by Statistics Estonia, yet the revenues shown in tax declarations moved up only 4.7 percent.

Revenues in the sector of motor vehicle sale and construction declined respectively 7.4 percent and 5.9 percent. In all the previous months during 2012 revenues of the construction sector grew by double digit figures year on year and the decline can be attributed among other things to the reduction in orders of the state in connection with the exhaustion of the funds attracted by selling carbon emission credits, said the ministry.