Government approves 2017 budget bill

The government debating the 2017 state budget. (Riigikantselei)
9/27/2016 3:40 PM
Source: BNS
Category: News

The government on Tuesday approved the state budget bill for 2017. Spending will increase by 7.3% to a total of €9.57bn. This means a nominal deficit of the government sector of 0.5% of Estonia’s gross domestic product.

Income is budgeted to total €9.43bn, expenditures €9.57bn. Although this means a nominal deficit of 0.5% of GDP, the budget will have a structural surplus of 0.2% of GDP.

At €6.65bn, tax income is budgeted to make up 70.6% of total fiscal inflow next year. Compared to the current year, tax income is expected to grow by 5.4%, or €338.7m.

Spending is projected to grow by 7.3%, or €649.8m. Of this amount, 263.3 million were allocated on the basis of the fiscal strategy and as a result budgetary discussions. The remainder is distributed on the basis of earlier obligations.

The Ministry of Education and Research is getting €7.9m to cover expenditures of private schools in accordance with a judgment of the Supreme Court. The Ministry of Defence is getting 17.3 million to cover the cost of hosting more allied troops in Estonia.

Education and Research will also get €7.7m to raise teachers’ salaries by 3%. The Ministry of Justice will get €600,000 to increase the pay of interior security employees by 3%, and the Ministry of Culture €1.6m to increase salaries by 3% also.

The Ministry of Economic Affairs and Communications stands to get €3m to introduce an investment subsidy for large-volume investors, €6.3m to cover costs related to Rail Baltic, and €2.3m to be given to operator of domestic passenger trains Elron to cover lease payments. In addition, the state allocates €4m to ensure the sustainable financing of state-owned railway infrastructure company Eesti Raudtee.

The Ministry of Foreign Affairs stands to get €12.4m to go on renovating the building of the Estonian embassy in Moscow, and 2.4 million in connection with payouts made to staff while on mission abroad becoming subject to taxation. The ministry will also be paid €500,000 to be used to campaign for a non-permanent seat on the UN Security Council.

As usual, the part of government with the biggest budget is the Ministry of Social Affairs, whose budget of €3.84bn will be €253.2m or 6.6% larger than it is in 2016.

Starting 2017 people who earn less than €652 a month can apply for a tax refund for the previous year. The basic exemption will be increased to €180, and the social tax rate will decline from 33% to 32.5%.

National defense spending will increase by €28m to 2.17% of GDP.

The size of the the budget of the Estonian presidency of the EU in the second half of next year is €66m. As part of the presidency events, 11 informal ministerial meetings, seven high-level conferences, and 203 meetings of experts will take place in Estonia.

Editor: Dario Cavegn

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