Sester: Gap left in state budget by decreased dividends to be filled by improved receipt of taxes
According to Minister of Finance Sven Sester, the gap in the state budget left by the decrease in dividends from state-owned enterprises will be filled by improved receipt of taxes.
The Estonian Government confirmed the total amount of dividends to be paid into the state budget by state-owned enterprises to be 93.7 million euros, which is 35 million euros less than last year, reported ETV’s nightly news broadcast “Aktuaalne kaamera”.
The state determines the amount of dividends to be paid based on the economic results of each individual company, first and foremost on its net profits and planned investments. A total of 12 state-owned enterprises will be paying dividends this year, of which the biggest amounts to be paid are 35 million euros from the Port of Tallinn, 31 million euros from Elering, the country's transmission system operator, and 10.9 million euros from Estonian Air Navigation Services.
The state initially budgeted for 183.9 million euros in dividends, or nearly twice the current amount. Among other changes, however, the state will not take any dividends whatsoever from international energy firm Eesti Energia, who had for years been the biggest payer in dividends.
This significant exception was justified by the Ministry of Finance based on the fact that the company’s earnings and cash flow had decreased as a result of low prices on the oil and electricity markets. According to Minister of Finance Sven Sester, the remaining amount will be covered by other funds.
“We will also consider receipt of taxes, and currently speaking, receipt of taxes during [the year's] initial months has been much better than what we had planned,” explained Sester. “We also have the option of reconsidering our decision regarding Eesti Energia at the end of the year, but currently we are seeing that various taxes accruing to the state budget are allowing for the opportunity for state-owned enterprises to pay out less in dividends."
Prime Minister Taavi Rõivas added that this is very typical fiscal policy. “Sometimes it has been staggered, and dividends are paid out sooner or later than planned, and this also usually for very practical reasons — what is a given company’s cash flow, what is that of the state — which are then reviewed in a balanced manner,” explained Rõivas.