Riigikogu passes bill lowering alcohol excise duty rate by 25 percent

Banks agree that the July 1 excise duty slash should reduce inflation further, but by how much is open to debate. Source: Anna Aurelia Minev/ERR

At its third and final reading on Thursday, the Riigikogu voted 70-9 in favor of a bill that will lower the alcohol excise duty rates for beer, cider and hard liquor by 25 percent beginning July 1.

The bill amending the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, which was introduced by the parliamentary groups of Isamaa, the Conservative People's Party of Estonia (EKRE) and the Centre Party, will lower the alcohol excise duty rates for beer, cider and strong liquor in an effort to curb cross-border trade.

The letter of explanation accompanying the bill noted that with the lowering of alcohol excise duty rates, businesses will be given the opportunity to reduce alcohol prices in order to bring cross-border trade with Latvia under control.

According to the letter of explanation, reduced alcohol prices in Estonia may lead to a reduction in the amount of alcohol purchased in Latvia and an increase in the amount of alcohol purchased in Estonia.

In the course of the second reading, the Finance Committee of the Riigikogu made an addition to the bill aimed at preventing excise goods on which duties have already been paid in Estonia from being transported to another member state and then returned to Estonia in order to apply the new, lower excise duty rate. Thus, goods which have already been released for consumption in Estonia will be subject to the excise duty rate in force upon their initial release.


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Editor: Aili Vahtla

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