Latvia to lower excise duty rate on strong liquor Thursday

A 15 percent lower excise duty rate on strong liquor is to enter into effect in Latvia on Thursday. The reduced excise duty rate will apply through Feb. 29, 2020, writes ERR News.

The reduced rate will not apply to beer, wine or other alcoholic beverages containing up to 22 percent pure alcohol.

On July 8, the Saeima passed amendments to Latvia’s excise tax law in response to Estonia’s decision to lower excise duty rates on beer, cider and strong liquor by 25 percent as of July 1.

After Estonia’s decision to reduce its excise tax on alcohol, alcohol sales in the border town of Valka have fallen, but not as dramatically as initially expected, Valka Mayor Vents Krauklis told Latvian Radio on Wednesday morning.

Krauklis said that alcohol sales have dropped by about ten percent, wrote The Baltic Times.

According to Krauklis, Estonia’s main aim in reducing the excise tax on alcohol was to regain so-called alcohol tourists from Finland, which it has likely been successful in achieving.

Coop marketing director Andres Lember told Finnish public broadcaster Yle that strong liquor sales increased some 20 percent on year this month.

According to Lember, strong liquor sales have increased the most in stores along Estonia’s southern border. He added, however, that once the reduced alcohol excise duty in Latvia kicks in on Aug. 1, Estonians will start heading across the border to buy alcohol again.