Distillery CEO: State Indifferent to Illegal Booze Market
The state is not interested in dealing with bootleg alcohol dealers but instead prefers to slap distilleries with higher excise duties, said Janek Kalvi, chairman of the Alcohol Producers' Union and CEO of state-owned distillery Liviko.
The institute of Economic Research and a number of other supervisory bodies are well aware that every fourth bottle of alcohol consumed in Estonia is illegal, said Kalvi. This, however, does not seem to bother legislators, who compensate the tax revenue lost to black market dealers by raising the alcohol excise levels each year, Kalvi told uudised.err.ee. He added that, last year alone, the state received 170-million euros from the duty.
Alcohol excises rose by 5 percent in February - a move planned by the Parliament last year. The increased duty is expected to generate an additional 10 million euros in revenue for the state this year. The tax has risen 38 percent since 2008.
According to Kalvi, excise tax has become a tool to fill gaps in the state budget. Policy-makers need to stop raising the tax, or if they do, then not more than 5 percent at a time, said Kalvi, adding that such decisions must be discussed with companies beforehand.
Ingrid Teesalu