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Committees don’t back justice chancellor’s criticism of excise hike

Estonia's only pure spirits producer is in trouble (Picture is illustrative).
Estonia's only pure spirits producer is in trouble (Picture is illustrative). Source: (AFP/Scanpix)

The Constitutional Committee of the Estonian parliament did not support the opinion of Chancellor of Justice Ülle Madise that the fast-tracked increase in alcohol excise duties was unconstitutional. The Finance Committee came to the same decision.

Chairman of the constitutional committee, MP Ken-Marti Vaher (IRL), said that the chancellor of justice would likely take the matter to the Supreme Court.

“The constitutional committee took the view that the said legislative amendment by which the rates of the alcohol excise duty were raised is constitutional, and it doesn’t support the proposal of the chancellor of justice, and this is the position that we’ll go to the plenary with,” Vaher told BNS on Monday afternoon.

Vaher cited three reasons behind the committee’s stance. “First, the increase in alcohol excise duties is definitely justified, and this is what the chancellor of justice did not contest in her opinion either,” Vaher said. “Alcohol clearly causes health damage, and compensating for this damage is what the excise duties are for,” he added.

Second, the persons affected by the higher rates had been notified long enough in advance. “There were very serious debates already in 2014 about evening out the excise duty rates for beverages with a different alcohol content. Hence it can’t be said that the change came as a surprise to some of the parties,” Vaher said.

Third, it had long been established practice to make changes to the tax ladder in this manner. “This was legislative practice earlier and has never been contested,” he added. “In our view it should also be constitutional that the concept of legitimate expectation can’t be this flexible. It needs to be defined clearly. In the present case, public interest in explicit change—a rise in excise duties, that is—should be significantly greater than the interests of those who are affected by this increase in excise duty rates.”

Finance Committee rejects chancellor’s opinion as well

Earlier on Monday the parliament’s Finance Committee had also refused to support Madise’s proposals. According to its chairman, MP Mihhail Stalnuhhin (Center), members asked the chancellor 12 questions, after which the committee decided not to back her.

“The references to taxes did not appear correct, and the existing precedents as well as the interpretation of some words looked rather dubious, too,” Stalnuhhin explained the committee’s position. Furthermore, the chancellor had said right at the outset that she was not certain at all if the Supreme Court would support her opinion if the matter reached it, he added.

Generally speaking, the discussion had resulted in a more exact understanding of the issue, but all participants had already formed their views beforehand, Stalnuhhin said.

The question would now have to be debated in parliament. “The Board of the Riigikogu will now decide the day on which the plenary discussion will take place,” he said.

Madise deemed the new government’s fast-tracked alcohol excise rate increase to be unconstitutional in that they violated the freedom of enterprise and the principle of legitimate expectation. In Madise’s opinion, the sooner-than-planned excise duty hikes starting Jul. 1 this year and Feb. 1, 2018 are in conflict with the Constitution.

Editor: Dario Cavegn

Source: BNS

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