Estonian president approves 2025 state budget
On Wednesday, President Alar Karis promulgated the 2025 State Budget Act.
The president approved laws related to an increase in excise duties on alcohol, tobacco, fuel and electricity, the security tax, the responsibility of ministries in their respective sectors, and compensation for commercial carriers.
The laws approved also concern the identification and assistance of children in need and foster care, waste management, public health, the rights of the prison service, the customs law as well as scrap and end-of-life vehicles.
The 2025 State Budget Act will have a revenue volume of €17.7 billion and a spending volume of €18.2 billion. Compared to this year's budget, revenues will increase by €0.9 billion, or 5.8 percent, and expenditure by €0.7 billion, or 3.9 percent. The budget foresees €1.9 billion in investments and investment grants. Defense spending will be 3.3 percent of GDP next year. The tax burden in 2025 will be 35.8 percent of GDP. The general government deficit remains at 3 percent of GDP.
In an interview with Vikerraadio on October 24, President Karis said that the state budget has to be easy to understand.
"The problem is not a new one, but it is still continuing in the same style. At the time, the possibility of activity-based budgeting was in the air and I said that it should create a more complicated situation in terms of understanding the text. It's not a question of activity-based or cost-based budgeting, it's just a question of making the budget understandable," Karis said at the end of October.
The president agreed with criticisms of the basic state budget law outline by Chancellor of Justice Ülle Madise and Auditor Genera Janar Holm.
The day before Karis was interviewed by Vikerraadio in October, Madise said during a public session of the Riigikogu's State Budget Control Select Committee that an activity-based state budget does not fit into Estonia's constitutional framework as it comes from countries with a two-party system, and in Estonia's system of government, costs have to be clearly spelled out in the law for everyone.
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Editor: Aleksander Krjukov, Michael Cole
