NordAN supports Latvian alcohol tax plans

NordAN sent an open letter today to Latvian government and parliament members congratulating Latvia for the amendments to the Excise Tax Law and urging them to keep on working with evidence based alcohol policies.

Saeima in Latvia on July 27th passed in the final reading amendments to the Excise Tax Law, which stipulate steeper increase in excise taxes on beer, cigarettes, and gasoline.

Starting March 1, 2018 the excise tax on beer will be EUR 6.8 per percentage of absolute alcohol by volume but no less than EUR 12.5 per 100 liters of beer. The tax will be further increased to EUR 7.4 in 2019 and EUR 8.1 in 2020.

Excise tax on other alcoholic beverages wilbe EUR 1,670 per percentage of absolute alcohol. The tax will be raised to EUR 1,840 in 2019 and EUR 2,025 in 2020.

Low alcohol prices in Latvia have been an issue for neighboring Estonia and Lithuania which both have introduced quite steep raises to alcohol excise taxes earlier this year and also to Finland which also looses tax revenue now not only to Estonia but also to Latvia.

“Of all alcohol policy measures, the evidence is strongest for the impact of alcohol prices as an incentive to reduce heavy drinking occasions and regular harmful drinking. The gains are greatest for younger and heavier drinkers and for the well-being of people exposed to the heavy drinking of others. Alcohol excise tax is important tool for both public health and overall tax revenue purposes,” the letter states.

“Within the European Union´s single market member states influence each others policies through price and income levels. As you are well aware, both Estonia and Lithuania have introduced major tax increases that has made Latvia´s lower prices attractive to their citizens. That weakens the effectiveness of your neighbor country´s alcohol policy. In that context we once again congratulate you for the decision to raise taxes and increase thus the public health cooperation between Baltic countries.”

Read the LETTER