Estonia's tax revenues rose 15.9 percent on-year in the first half of 2022, totaling €5.62 billion, the Ministry of Finance said on Wednesday. June's tax revenue was 18.1 percent higher than last year.
The ministry said more VAT has been paid than forecast due to the increase in economic activity and rising prices. Sectors that have seen the greatest growth are retail and wholesale trade (over 30 percent) and energy (over 101 percent).
Labor tax was 15.3 percent higher than forecast due to better-than-expected results, driven by rising salaries in the first six months of 2022. Employment is also at a historic high of 62.3 percent.
The biggest wage increases were seen in the accommodation and catering sectors, which increased by 62.3 percent. The growth was so high due to last year's low base caused by the pandemic.
Payment of social tax increased by 11.8 percent due to wage rises. The ministry said it needs to be kept in mind that an amendment to the Social Tax Act reduced the tax rate from 33 percent to 20 percent in some cases, which has reduced the amount of social tax paid by the state by €5 million per month.
The state budget has been most affected by income tax refunds and people leaving the second pension pillar fund.
€221 million was returned at the end of the 2021/2022 tax year, €17 million more than last year, while an additional €62 million were received from those who decided to leave the pension pillar. This is €39 million more than in 2021.
The amount of collected income tax rose by 12.5 percent in the first half of the year.
Corporate income tax has increased by 24.4 percent, mainly due to private sector (except banks) dividends and income tax which rose by 27 percent.
Sales tax rose by 20.2 percent - €261 million - and totaled €1.55 billion. The factors for this increase were high economic activity and rising prices of energy and other goods and services. Faster the average growth was partly due to the coronavirus restrictions being in place for a shorter amount of time this year.
Excise duties have risen by 4.2 percent, mostly from alcohol purchases which have risen by 15.3 percent. This large increase is down to fewer tourists in 2021 and coronavirus restrictions.
Duties on fuel increased by 0.5 percent this year and this small growth is related to a 19 percent decrease in natural gas volumes compared to the first half of last year. This has been caused by fluctuations on the global market.
Editor: Helen Wright