Economic forum focuses on excise taxes

  • 2001-04-12
  • Aleksei Gunter
TALLINN - More than 150 participants from seven countries discussed strategic cooperation in the Baltic region at the third Baltic Economic Forum held in Tallinn April 5 and 6. Many of the speeches praised possible unification of the excise taxes in the region.

The very first Baltic Economic Forum held in Riga in 1999 turned into an annual event in the business life of the three Baltic republics. Last year it was in Vilnius and Tallinn this year.

Mihkel Parnoja, Estonia's minister of economy, said the forum is designed to give the entrepreneurs a chance to share information about possible cooperation.

"We (Estonia, Latvia and Lithuania) certainly have spheres where we compete, but I hope that with the help of this forum we'll turn this competition into a healthy force to drive our economies," he said.

A positive example of cooperation among state enterprises is Eesti Energia's collaboration with Latvenergo, said Parnoja.

Indrek Neivelt, the head of Hansabank, said that Baltic companies have to think more about creating joint enterprises that would be more competitive on the world market.

Neivelt added it would be difficult for one company from the Baltics to create a strong trademark. "It would be easier to do it by combining capital from different republics," he said.

Andris Liepins, a representative of Latvia's Economy Ministry, said that most of the economic reforms – fiscal policy, privatization processes – in the Baltics were completed, and improving the business environment should be the next step.

"Our countries should not also forget to pay attention to the rest of the world, primarily Russia and the EU," he said.

Aadu Lukas, a board member of the Estonian Business Association and a well-known oil transit businessman, elaborated on the topic of Pan-Baltic cooperation.

"A unified excise system would save time and money regarding trade between the republics," said Lukas.

In Estonia, excises have been established on motor fuels and motor and fuel oil, on tobacco and tobacco products, on alcohol, motor vehicles and on the packaging of alcoholic and non-alcoholic beverages, according to the finance ministry.

The collection of the so-called European excise taxes in Estonia – the taxes obligatory for European Union member states on alcohol, tobacco and fuel – does not meet the requirements of the EU. The system of tax warehouses, where goods are levied with the excise tax when sold to the final consumer has not been introduced in Estonia yet.

Most of the excises are collected in Estonia at the border.

The Finance Ministry conducted a survey at the end of last year on the future of excise taxes in Estonia. The report concluded that after adoption of the EU system the collection of excises should improve as the amount of taxpayers will supposedly decrease due to stricter demands from importers.

Romualds Razuks, chairman of the Baltic Assembly Presidium, also stressed the importance of unification of the excise taxation rates, stating that major foreign investors and the EU consider the Baltic republics as one economic region.

"Harmonization of tax rates would create equal conditions for competition, decrease illegal imports and thereby increase the amount of tax revenue," said Razuks.

The question of excise system unification will be discussed further at the spring session of the Baltic Assembly in Riga on June 2 , according to Razuks.