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Home BUSINESSCabinet Committee backs moderate increase of tax on alcohol
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Thu, 03 Oct, 2013 03:35:44 AM
FTimes Report, October 3
 
Photo - Lehtikuva
The Cabinet Committee on Economic Policy extended Thursday 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, according to a press release.
 
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 per cent over the corresponding period last year.
 
The volume of imports totalled 75.1 million litres, or 8.8 million litres of 100 per cent 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 per cent alcohol. This would translate into tax hikes of 5 to 8.6 per cent depending on the category of alcoholic beverage.
 
Prices of spirits would increase on average by 2.2 per cent, beer and wine prices would be up on average by 2 to 2.5 per cent, and price hikes for intermediate products would average 3.7 per cent. Overall prices would increase by an average of 2.3 per cent. Retail prices would rise slightly more and on-licence prices slightly less.
 
The Cabinet Committee on Economic Policy also expressed its support for measures aimed at curbing travellers' imports.
 
The bill will now be submitted to the government.
 
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