Budget, Estonia, Financial Services, Taxation

In the first five months of the year 2017, tax inflow totaled 2.57 billion euros, 3.5% more than in the corresponding period a year ago and equaling 38.2% of the full year target.

Inflow of VAT totaled 184.8 million euros in May, marking an increase of 9.7% over the same month in 2016. In the main areas of activity taxable incomes grew 8.9%, the Ministry of Finance said.

The highest rates of increase in VAT payments in the last three months were registered in the sale of motor vehicles, 10.3%, and real estate related activities, 45.8%.

Receipts of excise duty totaled 87.5 million euros in May, 7.9% more than in the same month last year. Of fuel excise duty 23.9% more and of alcohol excise duty 35.4% more than last year was paid into the state coffers during the month. The fuel stocks accumulated ahead of the increase in the excise duty in February have been mostly depleted by now and declaring of the tax is returning to the usual level, the ministry said.

Inflow of the alcohol excise duty has been boosted by residents stocking up on low-alcohol beverages ahead of the hike in the rate of the duty for such beverages in July.

Receipts of personal income tax totaled 8.6 million euros in May, 26.1 million euros less than a year ago as a result of the VAT reimbursements made to low income earners. In May 29 million euros of VAT was returned to low income earners, about one-fifth less than originally estimated.

The budget of the government sector ran a deficit of 50 million euros at the end of May, equaling 0.22% of gross domestic product. According to the Finance Ministry, a deficit at the beginning of the year is normal and is attributable to the income tax refunds, among other things.

The deficit of the central government budget after the first five months of the year was 113 million euros and the deficit of social insurance funds 13 million euros.

The aggregate budget of municipalities had a surplus of 76 million euros at the end of May.