The biggest rise was in personal income tax, which grew by €256 million year over year. The main reasons were the increase in the income tax rate and the removal of several tax benefits, which meant less income tax was refunded this year compared with last year.

Corporate income tax receipts also increased by €213 million, as more dividends than usual were paid out in December ahead of the January 2025 tax rate hike.

"Dividends were paid out in December, but the declarations for them were filed in January. That's why they are reflected in January's receipts," said Raili Roosimaa, deputy director for the MTA for taxes.

Social tax revenue in the first half of the year rose by 5.6 percent, or €136 million, compared with the same period a year earlier. This was primarily due to a 5.4 percent increase in wage payments.

Value-added tax (VAT) revenue grew by 7.3 percent, or €133 million, compared with the first half of 2024. The growth in VAT receipts was driven, among other factors, by price increases and a significantly higher inflow in June ahead of the VAT rate hike.

Excise duty revenue was also mostly on an upward trend. The only decline was in alcohol excise duty, which fell by €7 million, or 6.8 percent, as businesses stocked up their warehouses before last year's rate increase.

According to Roosimaa, several factors contributed to the higher revenue.

"The main drivers were the growth in wage payments, changes in tax rates and the reduction of benefits for individuals," Roosimaa said.

More tax arrears owed

As of July 1, 2025, tax debt stood at €416 million. Compared with the first half of last year, the increase was driven mainly by social tax, personal income tax in special cases and the new motor vehicle tax.

"The size of tax debt is constantly changing — it depends, among other factors, on the declarations filed, tax proceedings and payment inflows. As a result, there can be sharp rises and falls over the course of the year. A clearer picture comes from the year-end summary, which shows the longer-term trend," Roosimaa said.

The number of individual debtors was most affected by the motor vehicle tax, which took effect this year, and to a lesser extent by the land tax, both of which had payment deadlines in the first half of the year. As of July 1, 2025, there were roughly 31,000 individual taxpayers whose debt arose or increased in the first half of the year. The number of corporate debtors grew by 2,000 during the same period.

According to Roosimaa, voluntary tax compliance in Estonia is very high — nearly 90 percent of individuals and businesses pay their taxes on time — thanks largely to an automated and user-friendly tax system that makes honest tax behavior easy.

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