TALLINN – The Estonian Ministry of Economic Affairs and Communications has prepared a draft regulation which aims to extend until the end of 2023 the support measure for international passenger shipping devised in 2020 as a tool to alleviate the impact of the COVID-19 pandemic.
The budget of the measure for 2023 would total six million euros, according to the draft.
The current regulation allows the subsidy to be paid until the end of 2022. However, according to the European Commission's state aid permit, it is possible to grant subsidies under the regulation until the final quarter of 2023. This option is what Estonia wants to implement, it appears from the explanatory memorandum added to the draft.
Continuing the provision of the subsidy in 2023 is necessary, according to the ministry, because shipping companies employ thousands of Estonian residents, constitute a significant part of the tourism sector and help ensure the movement of goods and people between countries.
It is estimated that the related costs are largely offset by labor taxes paid in Estonia and, more indirectly, by consumption taxes, especially those paid on the goods and services consumed by tourists aboard the vessels and in Estonia.
Currently, an estimated 2,500 people work on Estonian passenger ships. There are about 6,800 companies in Estonia that supply goods or provide services to shipping companies engaged in international passenger transport, so the passenger shipping sector also has a major impact on onshore jobs. Likewise, passenger shipping has a big impact on the country's tourism sector, accounting for 25 percent of total tourism sector revenue.