Revenues are set at €18.6 billion, expenditures at €19.5 billion, and investments at €1.3 billion.

Compared to the 2025 budget, revenues will increase by €843 million (4.7 percent) and expenditures will grow by €1.15 billion (6.3 percent). The total volume of investments will increase by €305 million (32 percent) in a year.

The government highlighted the increase in defense spending to 5 percent of GDP as the largest expenditure growth, requiring an additional €844.5 million next year.

Investments include air and missile defense, drone capability, as well as long-range and precision strikes. An air defense brigade and new engineer battalions will be created, C-RAM systems will be developed for the protection of critical infrastructure, and training and exercise areas will be expanded. Construction of defense industry parks will also continue. Nearly €50 million is planned for the design and preparation of the defense industry park in Pärnu County.

Estonia will continue supporting Ukraine with 0.25 percent of GDP (€110.7 million), most of which will go toward orders for the Estonian defense industry.

The largest reduction in revenues, €780 million, comes from introducing a unified €700 tax-free income allowance and canceling a planned two-percentage-point income tax increase. Estonia's tax burden will fall from 36.6 percent to 35.2 percent.

Due to the relaxation of the European Union's budgetary rule, the government will run a budget deficit of 4.5 percent of GDP. Such a large deficit has not been seen in recent years.

In terms of investments, the government plans €276.8 million for road infrastructure, including €65 million from the vehicle tax, and €684.2 million for railways, in part to ensure the completion of Rail Baltica by 2030.

Non-essential expenditures, including public building renovations, will be cut and postponed. Ministries will also reduce personnel expenses by €20 million.

The government will increase the wage fund for education, internal security, culture, and special care services by up to 10 percent, allocating about €117 million for this purpose.

Alongside tax changes, the net monthly income of those earning the average teacher's salary will rise by €319, or €3,828 per year. However, previous operating cost cuts will also apply in these same sectors — the total cuts across the education, interior, and culture ministries will reach €94 million by 2026, with the Ministry of Education and Research adding another €18 million through a budget review.

The average pension is projected to grow by 5.4 percent, with €210 million allocated for this in the budget.

With changes to the motor vehicle tax, the tax burden will decrease by €100 per child, reducing revenues by over €16 million. In addition, the tax rate on minibuses will be lowered.

The government will increase the subsistence benefits budget by a total of €4 million.

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