Minister of Finance Martin Helme announced via the social media that the receipts from alcohol excise duty have increased by 40 percent in July as compared with July 1018. The increase of revenue from hard liquor excise was as high as 174 percent or almost three times.
“The Tax Board completed the latest tax income report and a detailed press release full of numbers will follow soon (probably in early September - Ed.) but the dynamic of alcohol excise is of the greatest interest to me and probably most of the public. To make it short, it looks good!” Helme announced in Facebook.
According to the minister, the revenues from alcohol excise remained below the budget estimates and the spring economic forecast in January, March, May and June.
“Therefore we were heading for a shortfall before the tax amendment. The shortfall was large in June (eight million), but this was directly related to the expectations of excise reduction and the traders did not stock goods from the excise warehouses at the old price, but tried to sell as much as possible,” the minister explained.
According to the Tax and Customs Board, the revenue from alcohol excise last July amounted to 17.8 million euros, which was 40.3 percent more than in July 2017, when the weak alcohol excise was increased. If the income increased by a further 40 percent this July, the state treasury earned nearly 25 million euros from alcohol excise.
Helme stressed that this statistics does not include the large alcohol stores of the northern coast, but the port and shipping firm reports show that turnover went steeply up there.
“We can observe the same movement regarding beer sales: shortfall in the first half of the year and a clear surplus in July,” Helme added.
He emphasized that the main goal of the alcohol excise cut was to return the purchases to Estonia so that the taxes income reached the national budget.
“Thus we have to outline it again: the fact that more alcohol is bought here does not mean that it is drunk here. Who can understand, will; who does not, does not want to understand,” he added.
The Ministry of Finance will announce the June tax revenues in the next few days, but the preliminary data on alcohol and fuel sale in July will become available in September.
Besides that, the volume of crossing the Latvian border has also declined, according to Helme. “It should be pointed out that border crossing registers the movement of vehicles rather than the amount of goods purchased in Latvia. Just like the number of Finnish visitors has increased by a few percent but their purchases two times, it is obvious that the volume of purchases of people visiting Latvia has declined more than the number of visits,” the minister said.
According to Helme it is not yet possible to study the VAT revenue of July, but improvement is expected in that sphere as well.
The minister said that the receipts from VAT have raised concerns this year as the shortfall in the first half-year had been 32 million euros.