The Harmonized Index of Consumer Prices at constant tax rates (HICP-CT) is a satellite index of the Harmonized Index of Consumer Prices (HICP) where tax rates are kept constant during a year compared to the December of last year. Estonian’s HICP-CT takes into account changes in value added tax (VAT) and excise duties. HICP-CTs for Estonia are available from 2003.
Differences between the HICP-CT and HICP – In the event of tax rate change, the difference between the current HICP-CT and HICP would indicate the effect of the tax rate change on price changes assuming tax changes are passed on instantaneously and fully. The same weights and the same reference prices are used for the compilation of HICP and HICP-CT. During a year HICP takes into account all tax changes, HICP-CT keeps VATs and excise duties on the level of last year December, i.e. the price reference period. Tax changes are taken into account from the month when the respective law comes into force.
Domestic approach is used for HICP-CT. There are no consumption expenditures which are included in the HICP-CT but excluded from HICP.
Statistics Estonia updates every year the weights system of consumer price indices and base prices for calculations. In the current year (t) the reference prices for the calculations are the prices of the last year (t-1) December. The calculations are made on the base last year December = 100. The weights system of HICP-CT corresponds to the structure of private expenditure on the territory of Estonia in the last year updated to December (t-1). To ensure the comparison with previous periods, the index reference period for HICP-CT is 2005 = 100. Last year December is the linking month. The breakdown into groups of consumption is based on the Classification of Individual Consumption by Purpose (COICOP/HICP). Prices of goods and services are registered in ten Estonian cities every month. The observation period is the week including the 15th day of the month.
The HICP-CT is published in accordance with the Eurostat's Timetable for Transmission of Monthly HICP Results.
The annual index has been calculated as the average of 12 months.
COICOP/HICP (Classification of Individual Consumption by Purpose adapted to the needs of the HICP)
Example is valid for the indices published on the base period (here: 2005 = 100).
We want to know how much the HICP-CT has changed in January 2020 compared with January 2019.
|HICP-CT (2005 = 100)|
We find from the table
January 2020 – 146.11
January 2019 – 143.30
146.11 : 143.30 = 1.020 times or
(146.11 : 143.30) x 100 - 100 = 2.0%
Economic and Environmental Statistics Department
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