Minister of Finance Martin Helme (EKRE) said on Thursday that as a result of lowering excise duty rates on alcohol, sales on Estonia’s northern border have increased, indicating that Finnish tourists are once again buying more alcohol to take back with them from Estonia.
Speaking at the government press conference on Thursday, Helme said that initial figures are very encouraging, adding that it seems to him as though the government’s tax amendment objectives are coming to fruition. He did note, however, that they should wait for July tax reports next week, and that a longer trend is to be determined in September.
According to the minister, retailers immediately went along with the excise duty reduction, which is why Estonians are now buying less alcohol from Latvia and more from Estonia. This wast he goal, he highlighted, as excise duty rates were reduced because Estonians were buying alcohol from abroad and Finnish tourists were taking increasingly smaller amounts of alcohol back to Finland with them.
Prime Minister Jüri Ratas (Centre) said, however, that it is too early to draw any conclusions on the basis of a single month. He emphasized that Estonia would certainly not go along with a “rally” in excise duty rate reductions, and noted that amounts of alcohol consumed should also be monitored.
Excise duty rates on beer, cider and strong liquor were reduced by 25 percent in Estonia as of July 1.
Latvia, in turn, lowered its excise duty rate on strong liquor beginning Thursday; the reduced excise duty rate will remain in force through Feb. 29, 20220.