Cabinet Committee on Economic Policy supported moderate increase to alcohol tax
(Translation. Originally published in Finnish on 1 October 2013)
The Cabinet Committee on Economic Policy today expressed its support for the proposal by the Minister of Finance that the alcohol tax hike planned for 2014 be introduced at half the rate specified in the spending limits decision.
The reason for the scaled-down tax increase lies in the unexpected shrinking of the tax base in early 2013 and in the growth of travellers’ imports during the past year. From September 2012 to August 2013, imports increased by some 11.5% over the corresponding period last year. The volume of imports totalled 75.1 million litres, or 8.8 million litres of 100% alcohol.
Even though the tax hike will reduce statistical taxable consumption, it will not necessarily curb overall consumption if travellers’ imports continue to rise.
Under the Ministry of Finance proposal the tax on alcohol would be increased in 2014 by 2.15 euros a litre of 100% alcohol. This would translate into tax hikes of 5.0–8.6% depending on the category of alcoholic beverage. Prices of spirits would increase on average by 2.2%, beer and wine prices would be up on average by 2–2.5%, and price hikes for intermediate products would average 3.7%. Overall prices would increase by an average of 2.3%. Retail prices would rise slightly more and on-licence prices slightly less than this.
The Cabinet Committee on Economic Policy also expressed its support for measures aimed at curbing travellers’ imports. Apart from a public information campaign to remind citizens about legal travellers’ allowances, these measures would focus on shipping companies’ and customs authorities’ policies and practices. The guide levels laid down in EU legislation would be incorporated into national legislation. In cases where those levels are exceeded, travellers would be required to demonstrate that the beverages imported are for their personal use only.
The bill will now be submitted to Government.
Inquiries: Merja Sandell, Senior Government Adviser, Ministry of Finance, tel. +358 295 530 191