Government Approves Alcohol Tax Hike (2)

Published: 06.09.2012 12:45

Photo: Postimees/Scanpix

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The government today approved plans, agreed in budget talks this spring, whereby alcohol excise taxes will be raised by 5 percent per year for the next four years.

In a statement, the Finance Ministry said the long-term nature of the scheme would allow alcohol manufacturers to plan ahead.

At the time of their announcement in April, the proposed hikes drew sharp criticism from taxpayer representatives who said the changes would lead to increased levels of smuggling and consumption of black-market alcohol. Brewery owners, meanwhile, called the hikes damaging to the industry and a misguided effort to fill holes in the state budget.

The state is expected to collect an additional seven million euros in revenue from alcohol taxes in 2013, 22 million euros in 2014, 40 million euros in 2015 and 60 million euros in 2016.

The law will take effect on January 1, 2013.

 

Robin Ilves

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Comments (2)

  • George5%

    06.09.2012 15:30

    Question about your statement: "excise taxes will be raised by 5 percent per year for the next four years". If current liquor prices are €10 per bottle and the current excise price is €5 per bottle, will the first increase be 5% on €10 on the current price of a bottle or 5% increase on the current excise tax of €5?

  • 5aturn

    06.09.2012 17:10

    Notice how this is not about reducing consumption but about raising revenue for the state. By doing it slowly people get used to it and are less likely to change their drinking behavior.