Strong tax compliance brings over 7.5 billion euros to state budget in the first half of the year

Strong tax compliance brings over 7.5 billion euros to state budget in the first half of the year
Photo: Maksu- ja Tolliamet

According to Raili Roosimaa, ETCB’s Deputy Director General for Taxes, there are several factors behind the increased receipts. “The main factors are an increase in salary payments, changes in tax rates and decrease in incentives for natural persons,” Roosimaa explained. She also emphasised that voluntary tax compliance is very strong in Estonia, with nearly 90% of people and companies paying their taxes on time.

The biggest leap has occurred in the income tax of natural persons, the receipts of which increased by 256 million euros over the year. The main reasons for this are the increase in the income tax rate and the elimination of several tax incentives, which is why less income tax was refunded this year than last year. Corporate income tax receipts also increased by 213 million euros, as more dividends than usual were paid in December before the tax rate increase in January 2025. "Dividends were paid out in December but were declared in January. Therefore, the dividend payments are reflected in the receipts of January," Roosimaa explained.

Social tax receipts increased by 5.6% in the first half of the year, i.e. by a total of 136 million euros more than in the same period a year earlier. This was mainly influenced by the 5.4% increase in salary payments. VAT receipts increased by 7.3% or 133 million euros compared to the first half of 2024. The increase in VAT receipts is due, among other things, to price increases and significantly higher receipts in June before the increase in the VAT rate.

The receipts of excise duties were mostly on an upward trend as well. The only decrease occurred in the receipt of excise duty on alcohol, as at the end of last year, before the increase in excise duty, goods were stockpiled in warehouses. The decrease was 7 million euros or 6.8%.