Alcohol, Financial Services, Latvia, Legislation, Markets and Companies, Taxation

Prime Minister Laimdota Straujuma (Unity) told reporters after the Coalition Council's meeting on Monday that the proposal had been harmonized with alcoholic beverage producers and distributors, as well as with the Finance Ministry and Economy Ministry.

According to the initiative, excise tax on wine could increase by 9.3%, tax on fermented beverages with alcohol content over 6% and fermented sparkling beverages with alcohol content of up to 6% – also by 9.3%, and tax on beverages, which are not sparkling fermented beverages, with alcohol content up to 6% could decrease 45.3%.

Excise tax on beer would rise 22.6%, and excise tax on other alcoholic beverages – 1.7%.

Currently the excise tax rate on wine is EUR 64.03 per 100 liters, and according to the government's suggestion, it will increase to EUR 70 from July 1. Likewise, the tax on fermented beverages with alcohol content over 6% and fermented sparkling beverages with alcohol content of up to 6% would also increase to EUR 70, whereas tax on beverages with alcohol content up to 6%, which are not sparkling fermented beverages, would reduce to EUR 35 per 100 liters.

Excise tax on beer could increase from EUR 3.1 to EUR 3.8 per 100 liters, and excise tax on alcohol and other alcoholic beverages could increase from EUR 1,337.5 to EUR 1,360 per 100 liters.

The excise tax on alcoholic beverages could be further increased on April 1, 2016 and April 1, 2017. For instance, excise tax on beer could be raised another 10.5% in 2016 and 4.8% in 2017, so it would reach EUR 4.4 per 100 liters. Excise tax on wine is to be raised 5.7% in 2016 and 5.4% in 2017.

As a result, budget revenue would increase EUR 3.3 million this year, EUR 9.39 million in 2016 and EUR 10.22 million in 2017.