Alcohol industry welcomes Reform-Center 'tax peace' ({{contentCtrl.commentsTotal}})

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A cocktail being made at a bar. Photo is illustrative. Source: Priit Mürk/ERR

Estonian alcohol industry lobby groups have welcomed a proposed 'tax peace' put on the table in ongoing coalition discussions between the Reform and Center parties as a way to normalize a sector hit by the coronavirus crisis.

The Estonian Association of Alcohol Producers and Importers (ATML) and the Estonian Breweries Association (Õlleliit) say the proposal, effectively a meeting of minds between Center's more progressive-taxation-based approach and Reform's long-held flat-rate dogma will also gradually reduce pressure for additional support measures for businesses. 

The associations said that the crisis has delivered a painful blow to various sectors in the economy, hitting foremost the incomes of operators and employees of hotels, restaurants and cafes, and any other businesses connected with tourism.

A "tax peace" (Estonian: Maksurahu) which applies equally to direct and indirect taxes will help preserve jobs and the viability of many businesses which had been in good shape prior to the crisis. 

While stores selling alcohol have remained open since the pandemic began, bars and other outlets serving alcohol have been subject to restrictions, including full closure over the Christmas and New Year's period and beyond, in addition to losing out on revenue that tourists would normally have brought in.

Stabilization would also help diminish cross-border alcohol trade on the Estonian-Latvian frontier, which would help keep tax revenues and business inside Estonia and have benefits for border regions.

A 25 percent slash on excise duties for beers, ciders and spirits in summer 2019 was issued in part as the result of fears that not only was Estonian custom heading south, but also Finnish customers, a traditional mainstay of alcohol purchasing in Estonia in pre-pandemic days.

Reform's leader and prime-minister-in-waiting Kaja Kallas, and former education secretary Mailis Reps, declared the tax peace last Friday.

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Editor: Andrew Whyte

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