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State to commission €83,000 survey on economic impact of excise duty policy

The Estonian government is to commission a survey for €83,333 to determine the precise effect of the policy of sped-up hikes in excise duties and the resulting increase in cross-border trade on business as well as the Estonian economy more broadly, daily Postimees said.

The tender notice published by the State Shared Services Centre states that the excise duty policy of the Estonian state has been more dynamic than usual in recent years. This has caused dismay in residents and led to consumer behaviour on a large scale aimed at minimising the effect of the excise duty hikes by making purchases across the border. This in turn has had an impact on the businesses producing, selling or brokering goods on which excise duty is levied.

In addition, excise duties have a different kind of impact on the industry and other sectors of the economy by affecting the costs of inputs, such as fuel or electricity.

"Our knowledge is less precise and less up-to-date when it comes to the effects that the excise duty policy has had on businesses and through it on the economy more broadly," it stands in the tender notice. "And although we can assess it qualitatively, we see the biggest gap as existing in our knowledge of the quantitative impact of the excise duty policy on businesses and the economic environment. The objective of the survey is to fill this gap as comprehensively as possible."

Another objective of the tender is to ensure that policymaking in the future is as knowledge-based as possible. In order to ensure this, as precise information as possible is needed regarding what Estonia's excise duty policy has entailed.

The goal is for the Ministry of Finance and the next lineups of the Riigikogu as well as the public to have an in-depth analysis available to them of the economic impact of Estonia's excise duty policy of recent years, an assessment of the impacts of future choices related to excise duty policy as well as relevant policy recommendations, which together should help excise duty policy be more knowledge-based in the future.

The survey must be conducted by a team of at least three persons, including a project manager, an analyst and an expert. The deadline for the completion of the survey is February 2019.

Editor: Aili Vahtla

Source: BNS

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