Parliament Passed the Law to Raise Excise Duties

On Wednesday, December 11, the Estonian Parliament (Riigikogu) passed a law that will significantly increase the excise duty rates on alcohol, tobacco products, and gasoline between 2025 and 2028. The changes will take effect on July 1, 2025.

Summer Alcohol Excise Increase Abandoned
The law passed by the Riigikogu excludes an additional 5% alcohol excise increase that was planned for July 1, 2025. This means that alcohol excise will rise by 5% on January 1, 2025, as per the excise increase plan adopted in 2023, but no further increase will occur in the summer.

However, alcohol excise will increase by 10% on January 1, 2026, and by 5% on January 1 in both 2027 and 2028.

The chamber (koda) opposed the additional 5% excise increase planned for July 1, 2025, arguing that the Ministry of Finance did not sufficiently consider the impact of excise increases on cross-border trade and the black market. Additionally, there were questions about whether and to what extent these increases would actually boost state budget revenue.

Excise Duties on Tobacco Products and Gasoline Will Also Increase
The excise rates for tobacco products, including cigarettes, cigars, cigarillos, smoking tobacco, and tobacco liquids, will rise by an additional 5% on July 1, 2025. This means that in 2025, the total excise increase for tobacco products will amount to 10%, as a 5% increase is already planned for January 1, 2025, under the 2023 amendments.

Tobacco excise will rise by 10% on January 1, 2026, and by 5% on January 1 in both 2027 and 2028.

Additionally, excise duties on unleaded gasoline and fuel-like products will rise by 5% annually on May 1 from 2026 to 2028.

The changes will take effect on July 1, 2025. You can learn more about the excise increase plan HERE.