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Madise to take dispute over timing of alcohol tax hike to top court

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

Estonia's Chancellor of Justice is set to take the dispute over the sped-up increases in alcohol excise duties to the Supreme Court after the Riigikogu on Thursday rejected her proposal to amend the law setting out faster tax hikes.

The Riigikogu rejected Madise's proposal to bring the law into conformity with the principle of legitimate expectation with a 34-49 vote.

"The state not only has the right but also the obligation to protect public health," Madise said in her remarks before lawmakers on Thursday. "Since alcohol is one of the biggest factors behind damage to health, imposing restrictions on the production, sale and consumption of alcohol is in principle necessary and justified. However, it must not be done by violating the Constitution.

Madise posed the question of whether the sudden increasing of excise duties set out in law many years in advance which very intensively restricts the freedom of enterprise was constitutional. Judging by the Supreme Court's arguments in the case concerning mining fees, the answer should be that the amendments adopted at the end of December were not, she concluded.

The intensity of the infringement was likewise underscored by the fact that the basic document of Estonia's alcohol policy, the alcohol policy Green Paper drawn up in 2014, recommended raising excise duties at a rate of an average of 5 percent annually over the next four years. "This means that the increase of up to 88 percent in the excise duty rates for low-alcohol beverages was absolutely unforeseeable for businesses," Madise pointed out.

The Chancellor of Justice said that, for her, the core of this dispute and her primary hope when it came to the eventual decision of the Supreme Court lay in whether or not a promise made for a fixed term in Estonia's legal environment must create confidence in an entrepreneur that it would not be changed barring extraordinary circumstances.

"My wish is for there to be the possibility of making credible fixed-term promises — such as in order to bring certain kinds of investments to Estonia, develop environmentally sustainable energy or reasonable infrastructure — be it even for a period of six years, and indeed in such a manner that the promise will not be broken," she said.

Madise described referring the matter to the Supreme Court as a normal and constitutional course of events.

"We need to achieve clarity, and preferably before July 1," she said.

Editor: Aili Vahtla

Source: BNS

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