Estonia’s excise policy should be to keep the price of a liter of gasoline as well as that of a bottle of beer five cents below that of its southern neighbor, Martin Helme of the Estonian Conservative People’s Party (EKRE) said on Tuesday.
Helme said in ETV’s political debate show Foorum that the current excise policy was “absurd”, and that the state was giving away tax revenue to Latvia.
What Helme refers to is the fact that since an excise hike earlier this year, the number of people filling up their cars and trucks as well as buying alcohol in Latvia has risen drastically. This, according to Helme as well as other critics, has led to a situation where the state is losing more money to Latvia than it is receiving out of the increased excise rates.
“There are about two countries in Europe where beer is more expensive than in Estonia. Simplified, Estonia’s excise policy needs to be that a bottle of beer is five cents cheaper than in Latvia, and that a liter of gasoline is five cents cheaper than in Latvia,” Helme said. With that, Estonia’s tax revenue would be much bigger than it currently was with the higher excise duties, he added.
Former minister of finance Sven Sester (IRL), who before his replacement by his party was one of the main advocates of Estonia’s current excise policy, said that though Estonia was losing millions due to people getting alcohol and fuel in Latvia, the financial gain was still greater.
“The important thing is how much additional income the state gets out of the excise revenue. If we didn’t raise the excise rates, there would be less money for the budget,” Sester said.
Responding to Helme’s criticism of the government’s tax policy, Sester pointed out that the reality didn’t always correspond to expectations, and compared Helme’s simplified idea for Estonia’s alcohol and fuel excise duties with the call for shorter health care waiting lines, 50 percent higher salaries, and four-lane highways. The possibilities of what the state could do were always limited by what was available in the budget, Sester said.
Editor: Dario Cavegn