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Lauri: Canceling next excise duty hikes not enough anymore

Former Minister of Finance Maris Lauri (Reform).
Former Minister of Finance Maris Lauri (Reform). Source: (ERR)

Following the news that alcohol excise revenue in 2017 fell significantly short of its budget, former Minister of Finance Maris Lauri (Reform) said that canceling the next alcohol excise duty hike would not suffice and that the government should seriously consider lowering the excise duty rate.

Speaking in an interview with ETV's "Ringvaade" that day, Lauri found that recent years' duty hikes, the most recent of which entered into force on Feb. 1, have been too much for people.

"People have begun voting with their feet," she said. "Simply canceling the excise duty hikes won't suffice; we need to reduce them."

Estonia received 19.8 percent, or €55 million, less in alcohol excise revenue than budgeted for in 2017, the Ministry of Finance revealed on Thursday, noting that the decrease in declared alcohol volumes can be attributed to the decrease in consumption as well as increase in cross-border trade with Latvia, both of which were affected by the increased cost of alcoholic beverages.

"There are many reasons which have been discussed for a long time," Minister of Finance Toomas Tõniste (IRL) told ERR's radio news on Thursday. "The rapid increase in the excise duty rate has certainly been a key factor in why the budget has been smaller than expected, and such a large impact by cross-border trade had not been taken into account either."

The next planned excise duty hike, scheduled to take place next year, may be canceled altogether, the ruling coalition parties announced on Wednesday. The government will discuss the issue in April.

Editor: Aili Vahtla

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