OREANDA-NEWS. The government came together for a cabinet meeting to discuss the state budget strategy for the next four years. The discussion will be continued on Thursday.

Over the next four years, the government has planned to keep Estonia’s defence spending level at a minimum of two percent of gross domestic product, increase child benefits and reduce workforce taxes.

According to Prime Minister Taavi R?ivas, our economic outlook is also somewhat more pessimistic due to the deterioration of the global economic situation, and this encourages the government to make serious decisions.
“We still have serious work to do in order for the budgets to be balanced over the next four years. We expect further proposals from the Ministry of Finance on how to cover the deficit,” said R?ivas on summing up today’s cabinet meeting.
According to the Prime Minister, special focus should be on 2017 and 2018, when the expected deficit will be 0.2 percent of GDP according to forecasts from the Ministry of Finance.

Minister of Finance Sven Sester brought many proposals to the government today on how to cover the budget deficit.
For example, the government discussed the proposals for increasing the daily rate of fines and raising the excise duty on alcohol and tobacco by another five percent, in addition to the initially planned ten and five percent, respectively, in 2016. Both proposals were discussed, but no decision was made on them.

The discussion on the removal of the value-added tax concessions on accommodation establishments will continue at the next cabinet meeting. However, it was more or less concluded that the proposal of the Chamber of Commerce and Industry, which recommends gradually increasing the value-added tax rate on accommodation establishments, is worth analysing.
The government will continue the state budget strategy discussion on Thursday. The state budget strategy must be adopted by the end of May.