The Lithuanian government plans to allocate 3% of GDP to defence in the 2025 draft budget, Finance Minister Gintare Skaiste told Ziniu Radijas, BNS reports. However, if the economic indicators allowed, the government could borrow more for specific defence needs, she added. The minister noted that the projected 3% growth of GDP in 2025 would…
Estonia’s three-party coalition government has reached agreement on tax changes, Prime Minister Kristen Michal announced, ERR reports. He said that the government would raise the corporate profit tax, personal income tax, and VAT to finance increased spending on defence. The government will raise the VAT rate by 2 percentage points as of 1 July 2025…
The Estonian government plans to raise the country’s retirement age by one month as of 2027, ERR reports, citing daily Õhtuleht. Under the change, the new retirement age will be 65 years and one month. The retirement age is linked to the life expectancy of 65-year-olds. However, the retirement age cannot be raised by more…
The Estonian government will impose a lower ceiling on parental benefits and a cap on sickness benefits as of 2026, ERR reports. The government will reduce the maximum rate for parental benefits from the current three times the average wage to twice the average wage. The cut will affect around 3,500 people annually, or about…
Estonia’s incoming ruling coalition has agreed to implement budget cuts across all ministries, including defence and interior affairs, ERR reports. Margus Tsahkna, chairman of Estonia 200, said that each ministry would likely face a percentage-based cut to salaries and management costs, and that no new jobs would be created. The coalition plans to extend the…
Tax-free income in Estonia totalled EUR 4.15bn in 2023, according to the Ministry of Finance, ERR reports. In 2023, the tax-free income threshold was EUR 704 per month for pensioners and EUR 654 for working-age individuals. The ministry does not have a current forecast on the amount of tax-free income in 2024. Former prime minister…
Estonia’s incoming prime minister, Kristen Michal, said that the Estonian Reform Party would not propose reducing or repealing the tax-free income threshold during upcoming talks on forming a new coalition, ERR reports. Earlier, outgoing prime minister Kaja Kallas said that Reform had suggested lowering the basic income tax exemption, but that the party’s coalition partners…
National security, defence, and education will remain the main priorities of Lithuania’s state budget in 2025, Prime Minister Ingrida Simonyte stated, BNS reports. Speaking in an interview with Info TV, Simonyte said that the government would spend a large part of budget revenues to raise pensions, increase teacher salaries, and service the public debt. The…
The Estonian Reform Party has proposed reducing the tax-free income threshold to boost government budget revenue, Prime Minister Kaja Kallas revealed, ERR reports. However, she said that Reform’s coalition partners, Estonia 200 and the Social Democratic Party (SDE), opposed the idea due to its potential adverse impact on low-income earners. Interior Minister Lauri Läänemets of…
