The Lithuanian national air carrier flyLAL, which had aggressively entered the Estonian market at the beginning of the year, has made a decision to leave Estonia. The airline has cancelled flights on the route Tallinn - Vilnius for the 2008-9 winter season. Pre-sold ticket holders will have arrangements made for them Eesti Paevaleht reported. FlyLAL's head office had also said they were sending clients to Europe from Tallinn through Vilnius in the winter and since the quantity of similar flights has reduced it was necessary to cancel them. According to airline representatives, the last flight of this season on the Tallinn-Vilnius route will take place on Oct. 24.
Starting Jul. 1 2009, excises on gas and alcohol will increase and the depressed VAT rate will be cancelled. The VAT rate on medicines, books and periodicals will rise from 5 to 9 percent. VAT on other goods and services in which the related depressed VAT rate was applied until now, will be 18 percent, government public relations adviser Lijna Lepik said. Both strong and light alcohol will have taxes increased. "We discussed with the ministers the possibilities of budget income for the next year, and there was a whole package of changes in the taxation on the agenda," Minister of Finance Ivari Padar said. "It has been decided that, from July 1 of next year, the excise rate on gas will be raised and the difference in the VAT rate, not including the periodical presses, books and medicines, will be taxed at 9 percent," he added.
Jan. 1 2009 will see a new state duty law that will increase sums already paid for vehicle and documents from the Department of Citizenship and Migration Registrations by a third. The bill says the payment for primary registration will be increased almost twice. After two and a half months the payment for driving examinations and driving licence payments will rise also. By raising more than twenty state duties, the Estonian government expects to recover around 151 million kroons (9.65 million euros). The bill has already passed the first reading. It also increases fees for ID-cards and visa invitations, as well as for the residence permit application examination, which will earn the state treasury an additional 24 million kroons.