November 2022 tax take up 10 percent on year

Shopper in a supermarket (phot is illustrative).
Shopper in a supermarket (phot is illustrative). Source: Ken Mürk/ERR

The tax take in Estonia in November 2022 was up 10.1 percent on year, to €998.7 million, the Ministry of Finance says, citing date from the Tax and Customs Board (MTA).

In eleven months, ie. January to November, 97 percent of the state budget had been fulfilled, the ministry says.

Wage fund growth compared with 2021 rose marginally in November, rising to 13.6 percent, compared with 13.1 percent the previous month.

While wage growth itself stood at 11.3 percent, the growth in employment slowed to 1.9 percent to November, the ministry says.

The high energy prices experienced since late 2021 have also led to a fall in consumption, both of natural gas and of electricity, and both by domestic and commercial consumers, the ministry says, even as November 2022 was slightly colder than in 2021.

Energy price changes also affect all types of fuels, the ministry says, with consumption of motor vehicle fuel significantly falling.

Sales tax revenue slowed up in November also, to 7 percent, both due to a fall in economic growth, and to a high reference level relating to the release of funds from the so-called second pillar of the Estonian pension system, starting in 2021. A lower growth in VAT payments was also experienced, again relating to the effects of the liberalization of the second pillar; the fact that unlike in November 2021, in November last year, Covid restrictions such as mask-wearing were no longer applicable and did not affect consumption and economic activity, the ministry says.

VAT payments for January 2022 to November 2022 inclusive came to €2,973,000 a 16 percent rise (of €416 million) on year.

Inflation also lies behind this; it reached 21.3 percent in November, particularly in relation to staples such as food, as well as energy.

On the other hand, increased expenses reduce household savings buffers and saving capacity, indicating a deterioration in confidence, the ministry says.

Of the sectors with the fastest wage growth in November, finance and insurance (at 27.9 percent) where bonuses were paid, was most significant.

The growth of the three- and 12-month average wage fund continues to be driven by accommodation and catering (by respectively 25.5 and 41.2 percent respectively, the ministry says), mostly the result of the recovery that took place after the Covid crisis.

Income from payroll tax was strong. The payment of social tax rose slightly in November, by 11.5 percent, compared with November 2021.

The Ministry notes that in April 2022, an amendment to the Social Tax Act entered into force, as a result of which in certain cases the social tax rate was reduced from 33 percent to 20 percent.

This had the effect of diminishing social tax paid by the state by €5 million, per month. 

Personal income tax take (the share of the state budget and local governments in total) rose by 16.4 percent on year to November, a figure which includes the increase of the share of local governments' income tax, to 12.1 percent.

Excise duty payments increased by 1.2 percent on year to November, the ministry says, primarily relating to alcohol (especially strong alcohol and wine) and tobacco (a projected slowdown in the overall demand for cigarettes materialized).

The total turnover of companies in November reflected the trend of slowing economic growth, but the pace of growth in current prices remains strong, increasing by nearly 18 percent compared with a year ago

Areas of activity which saw a fall in turnover, however, included storage and transportation, construction of facilities and also the production of various equipment.

The VAT debt as of November 2022 constituted 54 percent of the tax debt, totaling €167 million – 3 percent down on year.

In November 2022 the tax debt as a whole decreased compared with a year earlier, by nearly 4 percent. 


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Editor: Andrew Whyte

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