The first reading of the State Budget for 2027 Bill started at a plenary sitting of the Riigikogu, the parliament reports. The debate was adjourned at the end of the sitting's working hours and was to continue the next day.
Under the bill initiated by the Government, the total volume of the budget is EUR 21.3 billion. Revenue is put at EUR 19.4 billion and expenditure at approximately EUR 20.2 billion, while investments amount to approximately EUR 1.2 billion. The Riigikogu writes that the budget deficit will be significantly reduced, which entails an additional EUR 250 million cut to state expenditure, and that defence spending stays above 5 percent of GDP.
The bill keeps the 10 percent cut in state expenditure that was agreed upon for the years 2025–2027. According to the parliament, the deficit will add EUR 2.3 billion to the debt burden next year, bringing it to 28.3 percent of GDP. Growth of 2.5 percent is expected this year and 2.3 percent in 2027.
For taxpayers the parliament's summary of the bill reads: Tax burden will decrease to 35.2 percent next year
— after 35.5 percent in 2026 and 36.2 percent in 2025. On the revenue side, social security contributions account for 29 percent of the state budget's revenue in 2027, VAT for nearly a quarter and income taxes for one-fifth.
Speakers for the parliamentary groups in the debate were Andrei Korobeinik, Martin Helme, Aivar Kokk and Riina Sikkut, the Riigikogu reports.
Source: Riigikogu, . The text above is our own summary; the words in quotation marks are the source's.
What this means for an Estonian entrepreneur
For an Estonian company the budget is the frame in which next year's taxes are paid: social security contributions, VAT and income tax are the largest revenue lines named in the bill. A company owner can use the end of the year to check that the company's VAT returns, payroll declarations and books are up to date before the new budget year begins, so that changes adopted with the budget meet clean records.
We keep the books of an Estonian company and prepare its VAT returns, payroll declarations and annual report. Accounting and annual reports