People expect the government to lower alcohol excise

Photo: Mailiis Ollino

A recent poll shows that while most Estonia’s residents expect the government to lower the alcohol excise, the voters of the Social Democratic Party (SDE) feel quite differently.

The Kantar Emor poll ordered by Postimees shows that 58 percent of respondents prefer the reduction of excise. Interestingly, nearly all socio-demographic groups would like to see the lower excise: men and women, urban and rural residents, the young and the retirees.

Aivar Voog, a survey expert of Kantar Emor, finds the criticism of the excise policy predictable. The subject is topical – the press is writing about the flourishing cross-border trade and lost tax revenue – while government members have also admitted raising the alcohol excise without any analysis of its impact on cross-border trade. Many opinion leaders have stated as well that the excise policy needs to be amended.

According to Voog, all this together is expressed by the opinion of Estonia’s residents that relieving the consequences would require an amendment of the alcohol taxation policy. Only the voters of the Social Democratic Party stand out in the analysis of the poll results. Nearly half of the Social Democrats’ supporters found that the excise should be maintained at the present level, while 35 percent of the party’s backers considered lowering the excise the best solution.

Voog admits that the stigma of alcohol excise has stuck with the Social Democrats. Political observers have also blamed the excise burden for the drop of the party’s popularity by several percent in the first months of the year.

“Everybody has realized that Jevgeni Ossinovski played a very important role in driving this move through in the government,” Voog said. “And apparently the Social Democrats’ voters are sensing as well that this is an issue their chairman promoted.”

But Voog decided that the support among the Social Democrats’ supporters does not necessarily mean an approval of the government’s current excise policy. He believes that this may be a defensive reaction. “It reflects the SDE supporters’ emotional relationship with the issue,” said Voog, “because support to reducing the excise would mean admitting that the policy they promoted was erroneous. This is something they definitely would not want.”

Kalvi Kõva, secretary general of SDE, does not agree with Voog that a majority of their voters supports retaining the current excise level only due to emotions. “The alcohol excise and price have become a symbol of sort, which enables expressing the dissatisfaction and political rivals have indeed managed to stick the excise-raising label on us,” Kõva said.

“On the other hand, it would be more interesting to see a poll asking how many people consider the issue important. It is simple and logical to say that any price should be lower. But whether this issue is really important for the people compared with all other problems is a more complicated matter,” he added.

Minister of Finance Toomas Tõniste (Pro Patria Party) admitted when commenting on the poll results that they had failed to foresee such boost to cross-border trade.

“This proves that the decision was incorrect, and the criticism of the public was justified,”  he said. The minister added the government had decided to cancel the excise rise planned for early next year as a way of correcting the mistake. “This is definitely a lesson everybody dealing with excise policy in the future must keep in mind.”