State budget for 2017 to increase to €9.5b

The Estonian government working on the 2017 state budget. (Ave Tampere/Government Office)
9/22/2016 10:05 PM
Source: BNS
Category: News

Estonia's 2017 state budget is set to grow 6.5 percent to 9.5 billion euros, according to preliminary estimates.

The Estonian government agreed on the 2017 state budget on Thursday night, which is to have a structural fiscal surplus of 0.2 percent while the volume of receipts and costs is to total approximately 9.5 billion euros, spokespeople for the government said.

Sources for covering expenditures were agreed upon in the spring already, and no additional tax hikes are to be expected.

"Next year's budget is directed toward growth in every sense — it has to kickstart the economy, increase our country's security even more as well as provide more of a sense of security to those who need it most," said Prime Minister Taavi Rõivas, adding that more effective governance as well as reforms will result in growth as well.

"When talking about fiscal political changes, it is important to note that people's tax burden will decrease by 0.2 percent next year," said Minister of Finance Sven Sester. "In addition, it was agreed that wages will increase in several sectors."

The teachers' salary fund is to increase in size by 4.643 percent, while the salary funds of social care workers, cultural workers with a degree and internal security workers are to grow 3.33 percent. According to Sester, it is a big change compared to the 2.2 percent agreed upon while drawing up the budgetary strategy in the spring.

Labor taxes are to be lowered in order to kickstart economic growth — basic exemption is to increase to 180 euros and the social tax rate is to fall from 33 percent to 32.5 percent, among other changes. In addition, the government is to make a substantial contribution to science funding as well.

The subsistence benefit rate is to increase to 130 euros, and people who earn less than 652 euros per month can apply for a tax refund for the previous year. In addition, pensioners living alone can apply for support worth 115 euros per year.

The child allowance for a family's first and second child is to increase from 50 to 60 euros per month; families with three children or more will get an additional allowance of 200 euros per month as of July 1. A maintenance allowance fund is also to be launched which will guarantee a monthly allowance for a child being raised by a single parent.

In addition, 2.18 percent of Estonia's GDP will be invested in security and the presence of allies in the country.

The state's receipts in 2016 are budgeted to total 8.84 billion euros and expenditures to total 8.92 billion euros.

Editor: Aili Vahtla

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