Russians buy Estonian ticket seller

LHV Capital that is majority owner of Baltic Ticket Holdings which operates ticket sales service under the name of Piletilevi, sold the online ticket seller to Russian company, reported Äripäev.

Baltic Ticket Holdings operates in the Baltic countries through its subsidiaries Piletilevi in Estonia, Bilesu Serviss in Latvia and Bilietu Pasaulis in Lithuania. The company also has an affiliate in Belarus named Biletik .

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Estonia’s richest businessman: tax system works

Transport businessman Oleg Ossinovski who was ranked no. 1 in the Äripäev richlist with assets of EUR 297m says that he is a strong advocate of the Estonian tax system, writes Äripäev.

He says that zero-income tax on reinvested profits is more sensible than regular income tax.

„Our tax system enables companies to develop rapidly by re-investing their profits, thus become stronger, more competitive, and, as a result, richer. In ten years, the state now starts to collecting tax since more companies are paying out dividends,” said the businessmen.

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Estonian oilshale may lose its value

Eesti Energia CEO Sandor Liive says that if the EU continues to toughen its climate policy, the value of the Estonian oilshale may plummet in 30 to 40 years.

„To the best of our knowledge today, the faster the state, the owner of our oilshale, uses oilshale the more value it will get out of it,” Liive said, speaking  at a press conference hosted by Eesti Energia.

„While at today’s rates, the Estonian oilshale may be worth EUR 18 billion, it could fall to zero in thirty to fourty years,” he added.

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Most of the production has been harvested

According to Statistics Estonia, by 15 September, 97% of the sown area of cereals, 79% of the sown area of rape and turnip rape, and 47% of the area under potatoes had been harvested in Estonia.

Compared to the previous year, harvesting has been considerably earlier this year. The yield per hectare of winter cereals is smaller, but the yield of spring cereals is better compared to the previous year. The yield of rape and turnip rape, peas and potatoes is bigger than last year.

According to preliminary data, in Estonia, in 2013 cereals were grown on 308,700 hectares, of which 97% has been harvested for grain. One hectare of the harvested area gave on average 3,317 kilograms of cereals, with the average yield per hectare being 1,981 kilograms for rye, 3,458 kilograms for wheat, 3,475 kilograms for barley and 2,664 kilograms for oats. A part of cereals sown for grain will be harvested for green fodder.

Rape and turnip rape were grown on 84,800 hectares. Most of winter rape and winter turnip rape has been harvested and more than three quarters of spring rape and spring turnip rape has also been harvested already. One hectare of the harvested area gave on average 2,000 kilograms of rape and turnip rape seeds.

Potatoes were grown on 6,400 hectares, of which 47% has been harvested. One hectare of the harvested area gave on average 21,982 kilograms of potatoes.

Source: Statistics Estonia

Refunding VAT on company cars may change

Estonian Ministry of Finance is considering a plan to limit the VAT refund that the state pays companies that purchase a company car, writes Eesti Päevaleht.

The Ministry has drafted a bill under which the state would refund only half of VAT that the company pays when purchasing a new car and a maximum of EUR 2,000.

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Swedbank: reasons for the wage rally

Rapid growth of wages has so far not hampered enterprises’ finances or pushed up inflation.
• Scarcity of labour is driving up wages.
• The fast growth of wages is expected to continue, so enterprises need to adjust.

The fast growth of wages has so far not affected enterprises’ finances
The growth of average gross wages (already above 8% in the second quarter of 2013, compared with last year) has supported the main engine of economic growth in Estonia currently – private consumption. The longer-term negative effects of labour costs’ growing faster than productivity are still to be seen. The share of enterprises’ personnel expenses in total costs or sales has not increased so far, and the overall profitability of Estonian enterprises remains good. Also, core inflation remains low and inflation expectations limited.

Wage growth is driven by the lack of suitable labour
Labour demand is growing faster than labour supply, pushing up wages. In addition, Estonian employers face competition from abroad, especially Finland, where the wage level is several times higher. In the future, the challenge of the lack of suitable labour will only sharpen. The supply of labour will decrease as the decline in the working-age population will be bigger than the increase in the participation rate. The unemployment rate is also forecast to get close to the level where additions to the suitable workforce will be hard to find amongst the unemployed and inactive.

The growth of wages is expected to remain rapid
Because the push factors are only getting stronger, we do not foresee the growth of wages to slow remarkably in the coming quarters, unless there would be an external negative shock. So, growing labour costs are eventually expected to start affecting enterprises’ profitability. It remains to be seen if enterprises will be able to increase productivity levels to match the higher labour costs.

Source: Swedbank report about the Estonian economy

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General government deficit adjusted

According to the adjusted data of Statistics Estonia, in 2012 the Estonian general government deficit was 0.2% and the gross debt level was 9.9% of the gross domestic product (GDP).

At the end of 2012, the total expenditures of the general government exceeded the revenues by 41.2 million euros, according to the Maastricht deficit criteria. The deficit of central government was 129.9 million euros, and in the local governments’ sector expenditures amounted to 32.2 million euros more than revenues earned in 2012. During the revision, the general government sector’s consolidated deficit decreased by 12.8 million euros; the revenues and expenditures of the central government as well as the local governments were corrected based on the audited state bookkeeping data. The surplus of social security funds was 120.9 million euros, but this was not enough to secure the balance of the consolidated budget.The general government consolidated debt (Maastricht debt) rose to 1.7 billion euros by the end of 2012. Two thirds of it resulted from the central government’s debt level which increased twice. The central government debt was 1.1 billion euros. The overall debt level of local governments grew to 0.6 billion euros. As at the end of 2012, social security funds did not contribute to the general government debt at all.Surplus/deficit by sub-sectors of general government in Estonia, 2003–2012

Diagram: Surplus/deficit by sub-sectors of general government in Estonia, 2003–2012

Surplus/deficit by sub-sectors of general government in Estonia, 2003–2012

Source: Statistics Estonia