Almost half of respondents in a survey by the Swedbank Institute for Finances said they are planning to use their income tax refund for day-to-day expenditures, while over a quarter had decided to save the extra money.
The ratio of those planning to use the refund for daily expenses is highest, 59 percent, among residents of ages 60-74. The ratio is lowest among young respondents of ages 18-29, Swedbank announced on Monday.
Use of the refunded amount to reduce one's financial obligations continues to be unpopular, as only 8 percent of respondents are about to use the refund to reduce the amount due under a loan or a lease agreement or on a credit card.
Manager of the Swedbank Institute for Finances Kati Voomets said: "The refund is to be used for day-to-day expenditures mostly by those whose monthly net income is under 750 euros and who are self-employed, unskilled workers, or unemployed."
The most likely to save their money are people under 29, and a similar trend was revealed also in the survey carried out in Latvia and Lithuania. It can also be seen that young people's interest in investing has grown with one in ten young people planning to invest the extra amount, Voomets said.
Of the respondents in Estonia, 16 percent are planning to use the refund for travel or hobbies, while 10 percent are thinking about construction or home improvement. Four percent are planning a purchase of household equipment or electronics, and as big a ratio of respondents would use the money for entertainment. Equally 3 percent of respondents named purchase of clothes or footwear, and purchase of home decoration.
Respondents said the amounts they are about to receive mostly are in the range from €101 to €300, while 10 percent must pay extra tax for 2019.
Where in Estonia and Latvia 15 percent of respondents are getting no refund at all, the ratio of such responses in Lithuania was 24 percent. In Lithuania, 11 percent of respondents were required to pay additional tax. The ratios of respondents having to pay additional income tax for 2019 were lower than 10 percent in both Estonia and Latvia.
The survey was conducted for the Institute for Finances by pollster Norstat by interviewing 1,000 residents of ages 18-74 in each of the three countries in February this year.
Editor: Helen Wright