Estonian tax ratio increased

In 2007, the revenues from the taxes and social security contributions increased by 23% compared to the previous year, bringing in to the state 79 billion kroons. The overall tax ratio increased to 33.1% in 2007; since 2002 the indicator had remained at the level of 31%.

Approximately three quarters of the tax income goes to the central government revenues. In 2007 the central government tax revenue accounted for 10 billion kroons more than last year, 56 billion kroons in total. Most of it (40%) came from the value added tax, which increased 17% compared to 2006 due to more active trading. The tax ratio of the central government tax revenues to the GDP has stood at around 20% over years.

The tax revenues of local governments rose by a quarter over the year — from 8.5 billion kroons to 10.6 billion kroons. The increase came mainly from the income taxes, because over 90% of the tax revenues of local governments is received from the income taxes. Due to the increase in the income taxes, driven by the growth of wages, the ratio of local governments’ tax revenues rose to 4.4% of the GDP.

In 2007, the revenue from the compulsory social security contributions (pension, health and unemployment insurances) was by a quarter higher than in 2006. Taxes which Estonia pays to the account of the European Union comprise approximately 0.4% of the GDP. These include the membership fee allotted from the value added tax and the customs duties collected in Estonia in the name of the European Union from the third countries.

Taxes and compulsory social security contributions by recipient (% of GDP)

The overall average tax ratio of the European Union has remained within the limits of 40% since the beginning of the 1990s.