What was the meeting of the Team for Budget, Remuneration and Social Benefits on 04/09/2020 about?
The draft budget act for 2021 and the discussion on the draft act amending the act on corporate income tax and certain other acts were the subject of a problem team meeting on budget, remuneration and social benefits. The meeting took place on September 4, 2020 in the form of a videoconference. The government side at the meeting was represented by Iwona Michałek – Secretary of State in the Ministry of Family, Labor and Social Policy and Sebastian Skuza – Secretary of State in the Ministry of Finance.
Deputy Minister S. Skuza informed that the draft budget act for 2021 was prepared taking into account the macroeconomic situation arising from the COVID-19 pandemic. He stressed that on the expenditure side, funds were secured for the continuation of the existing activities as well as for the implementation of new ones such as: increasing in 2021 expenditure on financing health care to 5.3% of GDP, increasing expenditure in the field of higher education and science and valorization of retirement and disability benefits from March 1, 2021. It is expected that the registered unemployment rate will increase from 5 , 2% in December 2019 to 8.0% at the end of 2020 to reach 7.5% by the end of 2021. The average annual increase in the prices of consumer goods and services by 3.3% in 2020 and 1.8% was assumed. in 2021. In 2021, the average wage in the national economy will increase by 3.4%. He mentioned that the level of state budget revenues in 2021 will be determined by the expected return of the economy to the growth path. The income forecast includes, inter alia, the planned change in the corporate income tax (the so-called Estonian CIT)
Deputy Minister I. Michałek informed that as part of the expenses for 2021, the Ministry of Family, Labor and Social Policy had secured funds for all tasks carried out and for the planned verification of income thresholds from social assistance.
In the course of the discussion, social partners raised issues related to, among others: planned savings in public administration, including employee layoffs, labor fund, property expenditure, funds for the verification of income thresholds from social assistance planned in 2021, funds in the budget for PPK and increases for teachers.
Later in the meeting there was a discussion on the draft act amending the act on corporate income tax and some other acts. The aim of the project is to implement the announcement expressed by the government regarding the introduction of a taxation system supporting smaller enterprises. The target group is entities particularly affected by problems with maintaining liquidity and access to financing.