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Estonia passes next years budget

  • 2008-12-11
  • TBT Staff in cooperation with BNS
TALLINN - The Estonian parliament has passed the 2009 state budget with a multi-billion kroon deficit.

The budget, which passed with a vote of 60-29 in the 101-member chamber, projects revenues at 97.838 billion kroons (6.25 billion euros) and expenditure at98.474 billion kroons.

Taking into account also the additional cuts introducedthrough the text of the budget, the expenditures work out at96.7 billion kroons, the Finance Ministry said.

The chairman of the standing Finance Committee, JurgenLigi, said before the vote that the panel failed to actuallybring about budget balance. "It shows a deficit of at leastthree billion (kroons) and that's a problem," Ligi said.

Increase in foreign aid accounts for the biggest growthin the next year's budget.

The government decided in the budget process that theincome tax rate will not be lowered next year as plannedearlier and it will remain at the current level of 21percent. An extra portion of income will not be exemptedfrom tax with the birth of a first child and the amount oftax-exempt income will stay at the present level of 2,250kroons a month.

The larger taxation changes concern VAT rates. Thereduced VAT rate on books and school workbooks, medicines,periodicals and the accommodation service will rise from thepresent 5 percent to 9 percent next year.

The 2009 budget includes a pay rise for teachers andgrowth of pensions.