The Reform-Eesti 200 coalition has opted to issue a supplementary budget for this year, mainly to help fund the ongoing eastern border construction work.
Other items will fund AI, a planned munitions plant, and cover the cost of lost revenues after online casinos were left exempt from paying tax.
The move will require an amendment to the 2026 state budget and so, properly speaking, is a supplementary budget, Minister of Finance Jürgen Ligi (Reform) said.
“We are not increasing expenditures for 2026. In that respect, it is a budget amendment rather than a supplementary budget. However, since it includes one item which increases the budget’s overall volume — but not expenditures — namely the financing transaction for the munitions factory, then legally it is referred to as a supplementary budget, although in substance it is still a budget amendment,” the minister explained.
“We have reduced this year’s expenditures by €29.3 million and rerouted that to urgent needs. The most pressing need concerns the interior minister’s field — €17 million to continue building the border,” Ligi added.
According to Ligi, the budget amendment also covers the development of artificial intelligence.
With the changed security situation, Estonia’s eastern border infrastructure is being enhanced to include fencing, surveillance cameras, access roads, and other features.
The supplementary budget will also compensate the Cultural Endowment Fund (Kultuurikapital) for losses caused by a clerical oversight in the taxation of online casinos.
“That slip-up that occurred at the Riigikogu must be compensated for. The government has taken it upon itself as a matter of principle to compensate the Cultural Endowment Fund. Out of our major generosity, we are also adding a bit of money directly from the Ministry of Finance’s reserves. In any case, we will cover that gap,” Ligi added.
Just over a fortnight ago, Prime Minister Kristen Michal (Reform) had said the government was considering adopting either a positive or negative supplementary budget this year, to adjust state spending and keep the deficit within a 4.5 percent limit.
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