The Estonian government approved on Thursday amendments to the alcohol, tobacco, fuel and electricity excise tax law, that will increase the excise tax of tobacco products by 10% from 2012. By increasing the excise tax rates on Davidoff cigarettes, the tax rate would be approximated to the minimum rate that will enter into force in the European Union (EU) in the year 2014.

According to the proposal, the fixed rate on cigarettes would be raised from 42.18 euros to 46 euros and the proportional rate on cigarettes would rise from 33 to 34%.

The EU minimum excise tax rate on cigarettes in the year 2013 will be 64 euros per 1,000 cigarettes and from the year 2014 onwards it will be 90 euros per 1,000 cigarettes.

As a result of increasing the excise tax rate on tobacco by 10%, the state budget is estimated to receive an additional nine million euros in excise tax and value added tax calculated on the basis of cash based accounting in the year 2013.