Estonia is considering reducing the rate of excise duty applied to the output of small producers of wine and cider, but not before 2020, Minister of Finance Toomas Tõniste (Pro Patria) said on Monday.
The Estonian Small Brewers' Association has proposed to the Ministry of Finance to apply a lower rate of excise duty to the output of small producers of wine and cider, as is the case with beer produced by microbreweries.
In his response, Tõniste pointed out that the relevant EU directive does not provide for the application of excise rates based on production volumes to cider and wine.
"Currently, amendments to the directive and the enabling of said preference are being discussed," Tõniste said. "We are examining the expedience of the application of a preferential rate. At the same time, let us point out that it is first and foremost consumption, not production, that is regulated with the excise duty. An excise duty rate dependent on the volume produced can be applied after the relevant amendment to directive 92/83 has entered into effect, which will presumably happen on 1 January, 2020."
At the same time, according to Tõniste, a proposal which would effectively allow for the production of wine and cider outside of excise warehouses cannot be supported. The minister said that, in accordance with the directive, excisable products on which duty has not been paid must be produced in an excise warehouse.
"All phases of production, bottling included, are deemed the production of alcohol," the minister explained. "As a solution, we see the registration of ageing and bottling facilities as premises or spaces used as an excise warehouse."
Editor: Aili Vahtla