Tax inflow of €674 million for August up 1.6 percent on year

The Estonian Tax and Customs Board was paid €674.4 million in taxes for the month of August, which is 1.6 percent more than the amount paid for August 2019.

After the end of the first eight months of the year, 70.5 percent of the supplementary budget had been fulfilled. More tax revenue had been received than was expected at the time when the supplementary budget was drawn up mainly thanks to a better-than-expected labor market situation and softer economic decline. Inflow of VAT is supported by gradual recovery of the economy and a reduction in arrears, the Ministry of Finance said in a press release.

“In August, the number of employees decreased by 4.7 percent and the increase in the average pay amounted to 5.1 percent compared with the previous year. The effect of the remuneration compensation on wages ended in July. Regardless of that, the increase in the average wage in August stayed close to the level for July,” Rait Kiveste, analyst at the fiscal policy department of the Ministry of Finance, said.

The increase in payroll was driven in August by healthcare with a rise of 11.5 percent and, of the smaller sectors, by information and communications with an increase of 9.6 percent.

Of social tax, 2.2 percent more was paid in August than in the same month last year. Although the remuneration compensation measure ended, the dynamics in intake was positive, which according to Kiveste may have resulted from people working in the healthcare and education sectors taking their annual vacation later. The inflow of personal income tax grew 6.9 percent year on year.

Of the income tax on dividends levied at a rate of 7 percent, €15.6 million was received in the first eight months of the year, €6.7 million more than in the same period in 2019. Receipts of the income tax on legal persons grew 8.8 percent, underpinned by income tax on the distributed profit paid by state companies in the amount of €13.8 million. Income tax on  dividends of the private sector declined by €10 million.

Read more: ERR.EE

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