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Excise tax hike to compensate for reduction of tax revenues after reform
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    Excise tax hike to compensate for reduction of tax revenues after reform

    Riga, April 21 (LETA) – Reduction of tax revenues as a result of tax reform will be compensated by excise tax hike on fuel, cigarettes and alcohol, according to the blueprint of the national tax policy framework 2018-2021 prepared by the Finance Ministry.

    Excise tax on lead-free petrol will be raised by 7.8 percent – from EUR 436 to EUR 470 per 1,000 liters in 2018. Excise tax on leaded petrol will be raised by 24 percent – from EUR 455.3 to EUR 564 per 1,000 liters.

    Excise tax on diesel fuel will be raised by 11 percent – from EUR 341 to EUR 378 per 1,000 liters, while excise tax on liquefied petroleum gas will be increased by 12 percent – from EUR 231 to EUR 205 per 1,000 liters.

    Excise tax on cigarettes should be raised by 5.5 percent – from EUR 67 to EUR 70.7 per 1,000 cigarettes.

    Excise tax on wine will be increased by 18 percent – from EUR 78 to EUR 92 per 100 liters. Excise tax on beer might grow 24 percent – from EUR 4.5 to EUR 5.6 per percentage of absolute alcohol by volume. Changes in excise tax on alcohol might be effective as of March 1, 2018.

    As reported, the Finance Ministry today sent its draft plan for tax reforms to ministries and partners for review. The Finance Ministry sent the blueprint of the national tax policy framework 2018-2021 to all line ministries, as well as social and other partners. The ministry expects findings to come in by April 24, so that the draft document can be put before ministers at an extraordinary government meeting slated for April 28.

    As reported, the tax reform proposed by the Finance Ministry provides for cutting personal income tax rate from 23 percent to 20 percent, scrapping solidarity tax and leaving microenterprise tax in place.

    The 20 percent tax rate would be set on personal income that does not exceed EUR 45,000 a year, and a 23 percent tax would be charged on income exceeding EUR 45,000 a year. The differentiated nontaxable minimum income would be significantly increased.

    The minimum monthly wage would be raised to EUR 430 from EUR 380, and the nontaxable minimum income for pensioners would be raised to EUR 300 from 235. The ministry also proposes allocating 1 percent of social security contributions to the health sector.

    • Published: 21.04.2017 15:47
    • LETA
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