Finland ups its alcohol tax to curb binge drinking

vodkaThe government of Finland has reported that in 2009 the state tax on all alcohol sales will be increased by an additional ten percent. The rationale behind this move is a bid by the government to discourage heavy drinking, which is continuing to be a major social problem for Finns.

The last state tax increase on alcohol was in September 2007. The AP news service reports that the 2007 tax hike was a direct response to a prior decrease in the alcohol tax which resulted in cheap booze pushing alcoholism up to the second leading cause of death in Finland.

In 2005, the Finnish government reduced its tax on alcohol by a whole 40 percent in an attempt to discourage heavy consumption on booze cruise ferries to Estonia and Russia, where alcohol is tax free, and thus very cheap. According to the Health Ministry, the result of that tax slash was a sharp increase in binge drinking within Finland itself.

The government believes the alcohol tax increase in 2007 wasn’t enough to curb Finland’s drinking problem, so the Finance Ministry has announced that in January 2009 the average retail prices on beer, wine and spirits will go up by around 4.5 percent.

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