The Bill on Amendments to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (6 SE), initiated by the Estonian Centre Party Faction, that provided for reduction of electricity excise duty from 4.47 euro to one euro per MWh of electricity, was at the first reading in the Riigikogu today.

The Bill was rejected with 43 votes in favour and 34 against. It was dropped from the proceedings.

Tarmo Tamm explained that the state can influence the final price of electricity for the consumer through various components, and electricity excise duty is one of such components in the final price of electricity.

“Today, every consumer pays electricity excise duty, including VAT, 0.5364 euro cent per kWh, but after the entry into force of the Act it would diminish by 2.9 per cent,“ Tamm said. He added that while the annual electricity consumption of an average family is circa 3500–5500 kWh, such family will gain 14 to 22 euro per year from the reduction of the excise duty.

Member of the Finance Committee Kalvi Kõva said that the Bill would bring about an approximately 78 per cent decrease of the receipt of excise duty in following years. Kõva noted that no financial source for covering these amendments have been proposed, and therefore this Bill cannot be supported

Kõva added that, according to the calculations made by the Government, upon the entry into force of the Bill, the receipt of excise duty and VAT on an accrual basis would diminish by 313.7 million euro in 2016 and, respectively, by 31.9 million euro in 2017.

Kõva said that, according to recent data, currently excise duty accounts for approximately 3.7 per cent of the electricity bill of a residential customer in Estonia, which means that excise duty may be said to represent a modest part of the final price of electricity.

The sitting ended at 10.49 a.m.

Verbatim record of the sitting (in Estonian).

Video recordings of the sittings of the Riigikogu can be viewed at https://www.youtube.com/riigikogu  (NB! The recording will be uploaded with a delay.)

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