Estonia will increase tax on alcohol and tobacco..

Estonia - Coat-of-Arms, click to enlarge:
September 25, 2009 - The Estonian government agreed yesterday, September 24th on principle on next the state budget 2010 and in order to cover spending in this budget, the state will increase the excise tax on alcohol and tobacco, Estonian dailies write.

It was agreed that the spending will amount to 89 billion kroons and the revenue volume will be 84 billion kroons. If the decision of the government is finalised, next year the excise tax on alcohol will increase by ten percent and excise tax on tobacco will be raised by 20 percent by the beginning of 2011. (1.00 Estonia Kroon = 0.0953559 USD)

Finance Minister Jürgen Ligi said that the tobacco excise tax has to increase by the beginning of 2011 by 20 percent as compared to the current level.

The Riigikogu (parliament of Estonia) decided already in summer that the tobacco excise tax will increase by 5 percent from January 1, 2010, i.e. by an average of 1 kroon per pack. A 20 percent tobacco excise tax increase means that by the beginning of 2011 latest, a pack of cigarettes will cost 4-5 kroons more than it does now. Finance Minister Jürgen Ligi did not rule out the possibility that the time schedule may be brought forward either.

Although the government hopes to get around 650 million kroons from raising alcohol and tobacco excise tax next year, Ligi hoped that the excise tax increase has a positive influence in this year’s budget context too. Earlier experience has shown that a month or two before the excise tax increase, the sale of alcohol and tobacco products will surge and thus, more excise tax will be collected. Ligi said that thus the excise tax increase will add a bit certainty that Estonia’s this year’s budget will fit into the criteria necessary to join the Euro.

Tobacco in Estonia..

Reference: Estonia will increase tax on alcohol and tobacco in 2010,
Juhan Tere, BC, Tallinn, 9/25/2009.