Estonia

Background: In 2017, the Riigikogu, Estonia’s Parliament, approved amendments to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act and the Tobacco Act despite strong opposition from the International Network of Nicotine Consumer Organisations (INNCO), a global coalition of consumer organisations from twenty different countries, which promote the interests of those who wish to switch from smoking tobacco to safer alternative nicotine delivery products.

The changes were contained in a bill which was submitted by the Government with the support of all the Cabinet except the Ministry of Justice, which held back its approval due to its opposition to a provision that would impose excise duty on products that do not contain nicotine.

The amendments create a new category of products, “alternative tobacco products”, that is subject to the tobacco excise tax. Included within this broad category is “tobacco liquid”, both flavored and unflavored, with or without nicotine, which is consumed in a device designed for that purpose. The excise tax went into effect on 1 January 2018 at an initial rate of 0.20 euros per milliliter of liquid.

With the adoption of the new excise tax, Estonia joins an growing number of European nations, including neighbors Finland and Latvia, which have adopted policies of taxing electronic cigarettes.

The Ministry of Finance estimates that in 2018 the new tax on alternative tobacco products will generate approximately EUR 1.1 million excise and value added tax revenue. This represents 0.58% of the EUR 190.35 million in excise alone collected from all tobacco products in 2016.