The first reading of next year’s state budget was adjourned in the Riigikogu

According to the State Budget for 2026 Bill (737 SE), initiated by the Government, the revenue of the state budget will be EUR 18.6 billion and the expenditure will be 19.6 billion. The budget foresees EUR 1.3 billion in investments. Compared to this year’s budget, revenues will grow by EUR 843 million or 4.7 per cent and expenditure by EUR 1.15 billion or 6.3 per cent. The total volume of investments will increase by 32%, or EUR 305 million, over the year.

The planned general government deficit amounts to 4.5 percent of GDP which remains within the limits of the exemption granted by the European Union for rapid increases in defence spending.  Next year’s debt burden will grow by EUR 1.7 billion to 25.9% of GDP.

The government says the increase in defence spending to five per cent of GDP is the largest increase in expenditure, which will require an additional EUR 844.5 million next year. The government is planning to invest EUR 276.8 million in road infrastructure, including EUR 65 million from motor vehicle tax, and EUR 684.2 million in railways, among other things to ensure the completion of Rail Baltic by 2030.

According to the Bill, state revenues will decrease by EUR 780 million as a result of the introduction of a uniform 700-euro income tax exemption and the cancellation of the planned two-percentage-point increase in income tax. The tax burden in Estonia will fall from 36.6% to 35.2%.

Together with the tax changes, the net income of those who earn the average salary of teachers will increase by EUR 319 per month, or EUR 3,828 per year. Previous cuts in operating expenses will also apply – the total cuts in the budgets of the Ministry of Education, the Ministry of the Interior, and the Ministry of Culture will amount to EUR 94 million in 2026, to which the Ministry of Education and Research will add another EUR 18 million through a budget revision. EUR 28.9 million will be allocated for salary increase in the area of ​​government of the Ministry of the Interior in 2026 which will allow front line rescue workers, police officers, rescue coordinators, and lecturers at the Estonian Academy of Security Sciences to receive a salary increase of nearly ten percent.

According to forecasts, the average pension will increase by 5.4 percent, with EUR 210 million allocated for this in the budget. The motor vehicle tax reduction for families with children and the taxation of 8-9-seater M-category vehicles similarly to the N-category vehicles, which will come into effect in 2026, will reduce the amount of motor vehicle tax to be collected by EUR 14 million. To achieve budget neutrality, EUR 48 million from motor vehicle tax will be allocated to the consolidated project for national roads.

According to the bill, the subsistence allowance limit will be raised by EUR 20 to EUR 220 and the subsistence allowance limit for each minor child in a family will be raised to EUR 264 for which an additional EUR 4 million will be allocated from the budget.

Due to the end of the working hours of the sitting, the first reading of the Bill was adjourned before debate which will take place at tomorrow’s plenary sitting. The report by Minister of Social Affairs Karmen Joller on the implementation of the long-term national development strategy “Estonia 2035” which was on the agenda for today’s sitting was also transferred to the agenda for tomorrow’s sitting.

Verbatim record of the sitting (in Estonian)

Video recording of the sitting will be available to watch later on the Riigikogu YouTube channel.

Riigikogu Press Service
Merilin Kruuse
+372 631 6592; +372 510 6179
merilin.kruuse@riigikogu.ee
Questions: press@riigikogu.ee

Link uudisele: The first reading of next year’s state budget was adjourned in the Riigikogu

Source: Parliament of Estonia