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Chancellor of justice deems alcohol excise duty hikes unconstitutional

Chancellor of Justice Ülle Madise.
Chancellor of Justice Ülle Madise. Source: (Siim Lõvi/ERR)

Estonia's Chancellor of Justice Ülle Madise has judged the accelerated increases in excise duty rates on light alcoholic beverages to be unconstitutional as they violate the freedom of enterprise and the principle of legitimate expectation.

In Madise's opinion, the sooner-than-planned excise duty hikes set to go into effect on July 1 this year and Feb. 1, 2018 are in conflict with the Constitution, due to which she proposed to the Riigikogu that they bring the law into keeping with fundamental law, it appears from the decision published Friday.

"In 2015, the Riigikogu used a regulation method which held out a promise to entrepreneurs not to raise excise duty rates in 2017 and 2018," Madise observed. "The next regular parliamentary elections will take place in 2019, which is likely why the possibility of an extra excise duty hike after 2019 was referenced."

By shifting the excise duty hikes forward, the Riigikogu broke the timeframe-related promise and the adopted law ran into conflict with the freedom of enterprise and the principle of legitimate expectation.

A promise tied to a specific deadline, for example a fixed-term contract, is more certain than a promise with an unspecified term, noted the Office of the Chancelor of Justice. As this is the case, preference should be given to a regulation method that would leave the next ruling coalition with the possibility of changing political choices. The state may only retreat from a specified-term promise in exceptional circumstances, such as a deep economic crisis.

"No such exceptional circumstances were involved in the accelerated alcohol excise duty hike," Madise observed. "The violation of the freedom of enterprise and legitimate expectation will damage producers, vendors and stores, particularly small stores affected by cross-border trade."

Editor: Aili Vahtla

Source: BNS

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