In Estonia tax intake grows by 5.4% y/y in June

The tax intake grew by 5.4% y/y to EUR611.8m in June, according to data published by the Estonian Tax and Customs Board. Thus, tax receipts in H1 accounted for 47.3% of the full-year target. Considering that the tax collection is stronger towards the year-end, we believe that the 2017 tax revenue target could be met. Proceeds from excise duties increased by 30.2% y/y to EUR97.2m, supported by higher household consumption. Revenues from fuel excise duty registered 21.0% y/y growth, while those from alcohol excise duty went up by 20.2% y/y, boosted by the higher excise tax rate. Considering that as of July, the excise duty on low-alcohol spirits was hiked, we believe that excise tax receipts will continue to increase at strong pace in the coming months. The increase of social tax payments continued to slow down and reached 7.4% y/y.

The general government budget recorded EUR5m surplus at end-June compared to EUR69m surplus a year ago. Municipalities budget posted EUR90m surplus, which offset the EUR77m deficit of the central government.