On Monday, the Riigikogu voted to pass a bill, raising excise duties on alcohol and tobacco products, ahead of its second reading.
57 Riigikogu members voted in favor of adopting the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act and the Act Amending the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act and Other Acts, put forward by the government. 35 MPs voted against.
Alcohol excise duty, which was last increased in 2018, will now rise by five percent per year between 2024 and 2026. Excise duties on cigarette and smoking tobacco excise, which in recent years have risen by five percent annually, will continue to rise by the same amount in 2024-2026. Excise duty on tobacco liquids will also increase by five percent per year for the next three years, and the minimum excise duty payable on cigars and cigarillos will rise by the same amount.
Prior to the bill's second reading, the government made an amendment to the draft law, according to which the maximum retail price of cigars and cigarillos will be reported with a precision of 10 cents instead of 50 cents, as previously outlined, if the cost is €10 or below.
In addition, to help support the competitiveness of Estonian farmers, the law removes the excise duty increases on special diesel fuel, which had been planned for 2024-2027. This means that the excise duty rate for special diesel will remain at €21 per 1,000 liters.
The bill passed its first reading on May 17, with 230 amendments then put forward before the deadline. On June 8, the coalition decided to tie the bill to a vote of confidence in the government (to avoid filibustering), in doing so taking over the duties of the responsible Riigikogu committee. Proposals to amend are not put to a vote in case of bills that are tied to a confidence vote.
Editor: Michael Cole