Latvian government approves higher excise tax on fuel and soft drinks

On Tuesday, October 8, the Cabinet of Ministers approved changes to the law on excise duty, which, among other things, will raise excise duties on fuel and sweetened beverages.

The Ministry of Finance (FM) proposes to gradually increase excise duty rates on fuel, as well as on natural gas and petroleum gases used as fuel, by the carbon dioxide or CO2 component: €10 per tonne of CO2 in 2025 and €20 per tonne of CO2 in 2026.

It is also proposed to abolish the excise duty exemption for oil products used in electricity generation and cogeneration, setting the excise duty rate as for oil products used as fuel.

The government also supported an increase in the excise duty rate on soft drinks.

According to the annotation of the draft law, the rate of excise duty on soft drinks with a sugar content of 8 grams (inclusive) per 100 milliliters and on energy drinks per 100 liters was increased from €14 to €17.5 on 1 March 2024 and is set to rise from €17.5 to €21 in 2026.

It is also proposed to increase the rates on alcoholic beverages, including beer, tobacco products, chewing tobacco, tobacco leaf, e-liquid, e-liquid ingredients and tobacco substitutes from 2027.

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