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Friday 18.01.2019 | Name days: Antis, Antons
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For the first time in Latvia’s history revenue from excise tax exceeds EUR 1 billion

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAccording to information from the State Revenue Service, revenue from excise tax exceeds EUR 1 billion.

The rise of excise tax revenue is not just tied to increased excise tax rates but also the expansion of the legal market of excise goods, which, in turn, points to optimal excise tax policy in the country, BNN was told by SRS.

52% of revenue from excise tax products came from oil products, 24% came from revenue from alcoholic beverages and beer, whereas 20% came from tobacco products in the 11 months of 2018.

SRS Excise Tax Goods Handling Office manager Baiba Šmite-Roķe notes: «This year concluded for SRS and its partners with excellent results – revenue from excise tax exceeds EUR 1 billion. At the same time, amendments to regulations were developed. These changes introduce not only stricter restrictions for grey economy combating measures but also reduce the administrative burden for honest businessmen.»

As of 19 December, revenue from excise tax revenue exceeds EUR 1.025 billion. This amount makes up approximately one-tenth of the state budget. SRS expects this amount to grow further.

Tax revenue growth benefited from a more predictable excise tax policy. Looking at the size of tax rates, it is important to keep in mind that the goal of this tax is not only contributing to the state budget to secure funds for wages of doctors, teachers and police officers but also reducing the consumption of unhealthy products (alcohol and tobacco) and pollutants (oil products), SRS explains.

While excise tax revenue in neighbouring countries reduces, revenue in Latvia only increases. Compared to last year, excise tax revenue from alcohol trade has increased – SRS collected EUR 45.8 million more in the first 11 months of 2018 when compared to 2017. It should be said approximately EUR 30 million of excise tax revenue comes from alcohol products purchased by Estonian residents in Latvia. They do this because excise tax on alcohol in Estonia is 1.5 times larger than it is in Latvia.

In spite of regular increases of excise tax, compared to the same period of 2017, revenue from cigarettes and tobacco trade has grown by EUR 15.9 million in 11 months of 2018. Although the number of smokers in Latvia keeps declining, the legal cigarette market remains stable – this points to successful state monitoring institutions’ combating of grey economy.

Excise tax revenue from oil product trade in 11 months of 2018 has grown by EUR 12.9 million when compared to the entirety of 2017. No excise tax rate increase is expected in 2019.


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