Government to hike alcohol tax every year on March 1st

On Monday, October 9, the Cabinet reviewed amendments to the Excise Tax Law which foresee steadily raising excise tax rates on alcoholic drinks, and tobacco products – including vaping– from 2024 to 2026.

The draft law envisages an annual increase of the excise tax for the group of alcoholic beverages classed as "other alcoholic beverages" – which includes strong spirits such as vodka and whisky – by 5% over the next three years.

For other groups of alcoholic beverages (beer, wines, fermented beverages and intermediate products) excise tax will be increased annually by an average of 10% over the next three years. Excise tax rates for alcoholic beverages will be increased on March 1 each year for the next three years, so the end of February could well see an annual rush to stock up from drinkers.

The price of cigarettes will rise by an average of 5.6% every year, but for cigars and cigarillos it will be hiked by a massive 23.8% every year "in order to bring the excise tax rate of 1 g of tobacco closer to the excise tax rate for cigarettes."

Rolling tobacco duty will rise by 10% every year, while for the and for e-liquid and e-liquid preparation components used by vapers, it will rise by an average of 21% every year. The changes on tobacco product duty are scheduled for March 1, 2024, January 1, 2025 and January 1, 2026

The measures are included in the package of accompanying bills of the bill "On the state budget for 2024 and the budget framework for 2024, 2025 and 2026", which enters into force on January 1, 2024, subject to Saeima approval of the budget.

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