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Budget revenue to rise by up to EUR 30 mln thanks to new excise tax rates on chocolate, sugar and salt in Latvia

BC, Riga, 06.07.2015.Print version
The Health Ministry of Latvia has updated its proposals for increasing budget revenue in 2015, by almost EUR 30 million in total; in order and to achieve this, the ministry is proposing to impose excise tax on chocolate, salt, sugar, and other products, the Health Ministry's representative Oskars Sneiders told LETA.

As reported, the Health Ministry has suggested introducing excise tax on several food products and crop protection products, which would generate an additional EUR 9.5 million in the state budget, the Health Ministry said yesterday.

 

The updated version of the Health Ministry's proposal submitted to the Finance Minister also stipulates excise tax on candies, chocolates and chocolate products, and pastry. The Health Ministry suggests imposing an excise tax of EUR 41 per 100 kilograms on these products.

 

The Health Ministry also wants excise tax of EUR 9 per 100 kilograms to be applied to salt, and EUR 14 per 100 kilograms – to sugar.

 

As reported, the Health Ministry has suggested that excise tax could be imposed on sausages and other such meat products, meat byproducts and food made of such products, canned meat, salted, cured meat and meat byproducts with salt contents exceeding 1.8 grams per 100 grams of the product. The ministry proposes an excise tax of EUR 7 per 100 kilograms of such products.

 

The Health Ministry also proposes excise tax on palm oil – EUR 21 per 100 liters, lard – EUR 21 per 100 kilograms, canned soups with salt contents exceeding 1 gram per 100 grams of the product – EUR 21 per 100 kilograms.

 

The Health Ministry believes that excise tax could also be imposed on potato chips, salted nuts, popcorn and other salted snacks with salt content of over 1.25 grams per 100 grams of the product – also EUR 21 per 100 kilograms.

 

In the meantime, the Health Ministry wants the excise tax rate for sweetened soft drinks to be almost doubled. At the moment, the excise tax on soft drinks is EUR 7.4 per 100 liters, whereas the ministry suggests raising the tax rate to EUR 14.

 

The ministry also proposes a new excise tax rate for soft drinks containing more than 15 milligrams of caffeine per 100 milliliters, including energy drinks, to EUR 21 per 100 liters.

 

The Health Ministry points out that several European Union countries traditionally apply excise tax to food products that are too fat, too sweet or too salted. The ministry notes that the excise tax rates it has proposed are in line with those in other EU member states and follow recommendations from the World Health Organization's experts.

 

The revenue from the excise tax on unhealthy food and soft drinks should amount to about EUR 29.9 million, believes the Health Ministry.

 

The ministry previously also said that, in order to reduce the impact of crop protection products on humans and the environment, organic farming needs to be supported so that the total amount of crop protection products is reduced or at least remains unchanged.

 

The Health Ministry believes that this can be achieved by increasing state duties for permits for the performance of Category A and B polluting activities, which are issued for the production or storage of crop protection products.

 

The Health Ministry also suggests imposing an excise tax of EUR 1 per 1 kilogram of a crop protection product.

 

Furthermore, the Health Ministry proposes imposing a EUR 2 excise tax per 20 milligrams of electronic cigarettes' e-liquids.

 

The Health Ministry's new policy initiatives, worth EUR 160 million in total, were handed in to the Finance Ministry at the beginning of June.






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