Excise duty cuts of 25 percent came into effect in Estonia on Monday. The rate slashing affects beer and cider, as well as spirits.
The law amending the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act 2008, in its accompanying notes, is aimed primarily at giving business operators an opportunity to cut alcohol prices in order to curb cross-border trade with Latvia, which gained momentum in 2015, BNS reports.
Successive hikes in excise duties in Estonia had, critics say, led to a large amount of custom from Estonia and even Finland traveling to Latvian border towns such as Valka or Ainaži (Estonian: Heinaste) to stock up on cheaper alcohol, to the detriment of Estonia’s economy as a whole.
Latvia too responded with a proposed rate cut of its own, at 15 percent, potential sparking off a trade war.
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