Souvenir makers want tax break, income compensation after 90 sales drop

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A souvenir shop in Vanalinn. Source: ERR

The Estonian Association of Souvenir Manufacturers and Sellers argues that to ensure the sector's survival, the support measures applied to the tourism sector must be extended to it, the sector should be compensated for losses caused by the emergency situation and exempted from all taxes until the end of 2021.

In a letter to the Riigikogu finance and economic affairs committees and ministries, Madis Medri, board member of the association, says the souvenir sector has suffered heavily due to the restrictions arising from the spread of COVID-19, its turnover has fallen by more than 90 percent and thousands of people have been left without work.

According to the association, at least three million purchases of souvenirs have not taken place due to plummeting tourist numbers and, according to its estimates, up to 90 percent of all souvenir shops in Tallinn will close by the end of 2020.

Most of the sector's companies meanwhile have significant debt obligations.

The association finds that in order to support the sector, sellers and producers of souvenirs should be deemed a part of the tourism sector and made eligible for support and participation in campaigns on an equal footing with tourism companies.

Sellers and manufacturers of souvenirs should also be compensated for the amounts paid to tourism sector enterprises as part of national support measures in May and November. The compensation should be paid on the same basis as to hotels, meaning as non-refundable aid in the taxed amount for 2019, but not more than €60,000.

In addition, sellers and manufacturers of souvenirs should be compensated for the financial losses incurred by them due to the declaration of the emergency situation, on the basis of a comparison of their sales in 2019 and during the corresponding period in 2020.

Furthermore, sellers and producers of souvenirs and handicraft companies should be exempted from all taxes, including local taxes, until the end of 2021. 

The association finds that also a media campaign should be financed by the government just like the "Puhka Eestis!" campaign promoting holidaying in Estonia to introduce the people active in the sector and their shops and business and improve the image of said field of business. 

In general, the size of the support should be sufficient to enable businesses to survive at least until next summer, the association said. 

"It is foremost the companies situated in Tallinn that are in need of aid, as here the crisis is the most extensive and critical," Medri added. 

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Editor: Helen Wright

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