Although according to current legislation the excise duty on alcoholic beverages in Estonia is set to increase 20 percent at the beginning of next year, junior coalition partner Pro Patria and Res Publica Union (IRL) is planning to head into state budget talks with a plan to cancel the hike.
"Of course we don't consider it reasonable to raise alcohol excise duty," IRL chairman Helir-Valdor Seeder told BNS, adding that it is his party's firm position that the previously agreed upon excise duty hike must be canceled.
At the same time, he could not say whether IRL could also support lowering the excise duty rates that have already been raised, as the party has not agreed on a position regarding this.
Estonia's alcohol excise duty rates have seen a considerable increase over the past few years. The excise duty on low-alcohol beverages has increased the most — for instance, the excise duty on beer has more than doubled compared to 2015. As a result, Estonians are making more and more trips across the border to Latvia to stock up on alcohol, and alcohol excise duty receipts have decreased as a result.
Estonia's government coalition decided to halve the excise duty hike scheduled for Feb. 1, 2018, leaving the hikes planned for 2019 and 2020 unchanged. According to the legislation, the alcohol excise duty is to increase 10 percent in both 2019 and 2020, while the excise duty on wine is to increase 20 percent.
Last year, Estonia's alcohol excise duty receipts totaled 87.5 percent of the sum budgeted for last year, meaning a €33 million shortfall in the state budget. Compared to 2016, receipts decreased 8.8 percent.
Editor: Aili Vahtla