Estonia to Increase Taxes on Alcohol and Tobacco

According to a report by the Baltic Times on April 14th, the incoming Estonian government is planning to raise taxes on tobacco and alcohol but has not yet announced the specific increase. Estonia is a Nordic country located on the eastern coast of the Baltic Sea and borders Russia, Latvia, and Finland.

Merlyn Sade, spokesperson for the Social Democratic Party, has announced that alliance partners have reached a consensus and that the Finance Minister will propose specific tax rates.

Matt Vorklaev | Photo source: Personal official website

Mart Vorklaev, the incoming Finance Minister of Estonia, has stated that "unhealthy behaviour" will continue to be taxed and efforts will be made to avoid an increase in cross-border trade.

Some professionals in the tobacco and alcohol industry believe that the government has discussed increasing taxes by 5% annually. However, they think that such an increase in consumption tax may affect purchasing power and could encourage cross-border trade. One of them said, "If Latvia does not raise its tax rate and people see our domestic tobacco and alcohol taxes increasing, they will go to Latvia to consume for this reason.

According to industry insiders, they believe that the consumption tax will have an impact on the entire industry, with taxes currently comprising almost two-thirds of the price of a bottle of high-proof alcohol.

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Estonia may ban disposable e-cigarettes.

Reference:

The new Estonian government is reportedly considering an annual increase in the pricing of alcohol and tobacco products, according to Postimees news.