Budget, Education and Science, Estonia, Financial Services, Investments, Legislation

Basing on the spring economic forecast, the government targets a structural fiscal surplus of 0.2% of gross domestic product for next year and fiscal balance beyond that, the government's communication office said.

To offset expenses, government institutions are to cut operating costs by 3%.

One of the government's priorities is increasing incomes. For this, the social tax rate will be reduced to 32.5% next year, which will slash budget receipts by 40.7 million euros. A rise in the tax-exempt income from 170 euros to 180 euros a month will reduce revenue by 15.7 million euros.

Regarding security as a priority, the government decided to maintain defense spending at not less than 2% of GDP in coming years. A total of 22 million euros will be spent on allied presence over the next four years and 70 million euros will be plowed into the construction of modern infrastructure on the eastern border.

To enliven the economy, research funding will be increased to 0.86% of GDP in 2017. In the longer term, the target is to spend 1% of GDP on research.

To strengthen local governments and prevent peripheralization, the income base of self-governments will be increased by 15 million euros in 2019 and by 25 million euros in 2020.

The national budget strategy serves as the basis for the 2017 state budget.