Estonia's tax revenue saw a significant increase of 1.5 billion euros in 2025, reaching a total of approximately 15.5 billion euros. According to the Estonian Tax and Customs Board (MTA), this amount reflects a growth of 10.9% compared to the previous year, which had been forecasted at just under 15 billion euros. The increase in tax revenue provided some relief to the government amidst rising expenses, particularly in defense.

Despite this positive trend in tax revenue, the public sector budget deficit at the end of December reached 532 million euros, representing 1.3% of the expected annual Gross Domestic Product (GDP). The Minister of Finance's representative, Kadri Klaos, noted that while defense spending has surged, the budget deficit has only slightly improved, decreasing by half a percent relative to the GDP from the previous year. The government is expected to face continued financial pressure due to ongoing increases in defense expenditures.

The growing tax revenues indicate a strong economy, yet they are overshadowed by the pressing need to manage increasing defense costs without jeopardizing fiscal stability. As Estonia navigates the challenges posed by its security needs and economic growth, the sustainability of its financial health will be critical in the coming years. The trends suggest an ongoing balancing act for policymakers in addressing both financial challenges and national security priorities.