According to the Ministry of Finance, a total of € 8.58 billion of revenue was received by the state in 2016, which is € 603.1 million, or 7.6%, more than the previous year.
“Last year, the state received tax revenue in the amount anticipated in the budget. I am also pleased to note that the expenditures of public authorities were within the budget as usual,” said Sven Sester, the Minister of Finance. “For the future, we hope to increase growth enhancing public investments.”
Tax revenues, including the taxes to be transferred to local authorities, the Unemployment Insurance Fund, the Health Insurance Fund, were received in the amount of € 7.53 billion, which is 5.7% or € 404.1 million more than the previous year.
Social tax receipts increased 6.5% (to € 2.55 billion) and VAT collection improved 5.7% (to € 1.96 billion). Excise duties were collected 11.2% more than a year ago, i.e. a total of € 970.5 million. The revenue from excise duties was affected by the stocking up of alcohol and fuels in anticipation of increases in tax rates in 2017.
The taxes to be transferred to local authorities, the Unemployment Insurance Fund, the Health Insurance Fund, and others were received in the amount of € 1.26 billion, which is 6.5% more than the previous year.
Non-fiscal revenues were received in the amount of € 1.1 billion – € 198.9 million more than in 2015. Of this, € 168.2 million came from the sales of goods and services; the rest of the revenue received was € 127.1 million.
The amount of aid received was € 616.4 million, including € 601.7 million of EU and other external aid, and € 14.6 million of domestic support. In 2016, we received external financing 62.2%, or € 230.8 million, more than in the previous year. The biggest part (298.4 million) or nearly 50% of external financing came from EU structural funds. Furthermore, € 119.7 million came from the European Agricultural Fund for Rural Development (EAFRD). Other agricultural payments received amounted to € 134.4 million, of this, € 35.5 million constituted of the instruments of the financial period 2007-2013 received in December.
Overall spending in 2016 came to € 8.56 billion, including € 575.8 million of external financing. Aid payments in the amount of € 4.05 billion, including € 410 million paid from external financing, constituted the bulk of expenditure. Other operating expenses constituted a total of € 2.71 billion, the major share being tax revenue, payments and other charges paid to local authorities, the Health Insurance Fund, the Unemployment Insurance Fund and other relevant authorities.
Labour and administration costs constituted 98.9% of the planned budget. Labour costs increased by 3.4% compared to 2015, constituting € 747.2 million. Administration costs increased 3.5%, constituting € 737.7 million at the end of December.
Last year, € 330.4 million was allocated to investment, which is € 116.1 million less than in the previous year. Public authorities invested, € 299.3 million, i.e. € 38.1 million less than in the previous year. Investment aid was paid in the amount of € 31.1 million. The level of investment was the lowest it had been in the last six years, mainly due to the investments made on account of external financing.
In the previous financial period, in 2007-2013, significantly more external financing was allocated to investments, such as: infrastructure, roads, transport, and real estate. In the current financial period, 2014-2020, more support has been given to services, the labour market, and education measures, cooperation and development programmes, and other development and mentoring programmes targeted to people.
Public authorities planned € 322.9 million in investments during 2016; nearly half of this amount, i.e. € 142.8 million, was invested by the Ministry of Economic Affairs and Communications into the construction and improvement of public roads. Investments have followed a similar trend every year – the spending levels are low in the first five months of the year and payments increase in the second half of the year due to large-scale subcontracting.
External aid was paid in the form of expenses and prepayments, in the amount of € 575.8 million, of which structural aid constituted € 293.2 million. Most disbursements made, were made in the area of government of the Ministry of Rural Affairs: € 228.6 million, the bulk of which constituted payments from the European Agricultural Guarantee Fund in the amount of € 127.2 million. The payments in the area of government of the Ministry of Economic Affairs and Communications amounted to € 159.9 million, including support to the strengthening of entrepreneurship and the development of transport.
In the current financial period 2014-2020, € 4.4 billion is available to Estonia from the structural and investment funds; additional funding can be obtained under various programmes and from different funds. If Estonian applicants continue to apply successfully, it is estimated that nearly two billion euros could be obtained for the implementation of various projects.
As of the end of December, the treasury held liquid financial assets, i.e. deposits and bonds, in the value of € 1.19 billion, which is € 44.5 million or 3.9% more than in December 2015. The liquidity reserve held € 765.3 million and the stabilisation reserve € 405.9 million.
At the end of November, the nominal general government deficit was € 24.4 million or 0.12% of the GDP. The deficit of the budgets of local authorities amounted to € 65.4 million. The central public deficit was € 86.8 million and the deficit of social security funds was € 3 million.
Source: Estonian Ministry of Finance
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