Last year, Estonia's state budget received 8.2 percent, or €88 million, less revenue from excise duties than planned, including 19.8 percent, or €55 million, less in alcohol excise duty than expected.
Last year, central government tax revenue paid €6.72 billion to the Estonian Tax and Customs Board (MTA), equaling 100.2 percent of the budgeted-for amount and exceeding the 2016 figure by 6.4 percent.
Excise revenue was 0.7 percent smaller in 2017 than the year before, falling 8.2 percent or €88 million short of the amount planned for in the state budget, €34 million of which are shifting excise reserves into other years. The decrease in receipts can be attributed to a decrease in the consumption of excise goods and an increase in cross-border trade.
Alcohol excise revenue €55 short
Estonia received 19.8 percent, or €55 million, less in alcohol excise revenue than budgeted for in 2017. The biggest difference compared to budget estimates, €32 million, was due to the volumes of alcohol subject to the previous lower excise duty rate purchased ahead of planned excise duty hikes. Over a 12-month period, 12.8 percent less was paid in alcohol excise duty than during the same period in 2016. When counting pre-hike alcohol stocks under the period during which they were paid for, however, 3.2 percent more alcohol excise duty was paid for alcohol consumed in 2017 than during the year before.
The stocking up on alcohol ahead of the first planned excise duty hike occured in November and December 2016; a larger than expected increase in the stockpiling of alcohol was also seen in June 2017, ahead of the second excise duty spike on beer and other low-ABV alcoholic beverages that entered into force on July 1. The next round of expected stockpiling of cheaper alcohol in December 2017 did not occur due to the government and Riigikogu's decision to halve the size of the next excise duty hike which entered into force on Feb. 1, 2018. The decrease in declared alcohol volumes can be attributed to the decrease in consumption as well as increase in cross-border trade with Latvia, both of which were affected by the increased cost of alcoholic beverages.
Fuel excise revenue €22 million short
While up 5.7 percent compared to 2016 figures, fuel excise revenues in 2017 fell 3.9 percent, or €22 million, short of the expected budget. The pre-excise duty hike stockpiling of fuel also affected fuel excise duty receipts, as some stockpiling took place partly in 2016, and more gasoline was stockpiled in January 2018, ahead of the hike, than expected. As a result of the stockpiling, €6 million more than expected was paid into the state budget. The decrease in volumes can be attributed first and foremost to the increase in the excise duty rate, and an increase in cross-border trade due to the increasing difference in excise duty rates with the neighboring Latvia and Lithuania.
Tobacco excise revenue €13 million short
Tobacco excise revenues also fell 6.2 percent, or €13 milion, short of the expected budget, €8 million of which was due to smaller than expected stcks in December. Compared to 2016, tobacco excise revenue was down 2.2 percent. At the same time, however, considering the stocks of pre-duty hike tobacco, 8.4 percent more tobacco excise duty was paid for tobacco consumed in 2017 than during the year before.
Social tax receipts exceed budget by €62 million
Due to rapid wage growth, 12.1 percent more social tax was paid in December 2017 than during the same month the previous year. The last three months' average number of declared employees grew at the previous rate of 1.8 percent, while average wage growth increased to 8.1 percent. At the end of 2017, declared employees accounted for a higher percentage of the working-age population than ever before. In 2017, €62 million more than, or 102.3 percent of, the expected budget was paid in social tax.
Editor: Aili Vahtla