Alcohol, Estonia, Financial Services, Markets and Companies, Taxation

Potisepp noted that raising excise taxes is not the correct form of alcohol policy. “If the policy is restricted to raising excise taxes, I am of the opinion that this is not a correct way of forming a policy. The alcohol policy should require prevention, improving the culture of alcohol consumption and also taking into account the financial side so as not to grant opportunities to the illegal market,” she explained.

Producers of alcohol state that sales of beer has been falling in the part few years and the increase in the excise taxes contributes to this trend.

The Ministry of Finance, on the other hand, is of the opinion that consumption is falling not due to price increase but rather due to falling incomes. “For example, consumption of wine in the first half of the year has fallen by 37%, despite the fact that excise taxes on wine were not raised last year,” said the advisor of the State finances department of the Ministry of Finance Sven Kirsipuu.

The Ministry of Finance is of the position that the surge in excise taxes has compensated for the tax revenue fall caused by the overall decline in consumption. The increase in excise taxes is a decision that supports the budget and hence it cannot be said that the move has not been beneficial.