Government plans to raise excise and gambling taxes

RIGA - Next year, it is planned to increase excise duties on alcohol and tobacco and gambling taxes, according to the information report "On priority measures to be included in the draft state budget law for 2026, 2027 and 2028" submitted by the Finance Ministry to the government.

In order to provide additional revenue for the state budget, it is proposed to increase the gambling tax rate per gaming machine from EUR 6,204 to EUR 7,440 per year, and per table for roulette and cards and dice from EUR 33,696 to EUR 40,440 per year, as from January 1, 2026.

The gambling tax rate for telephone games of chance, as well as for betting and wagers, is to be increased from 15 percent to 18 percent of the revenue from the organization of these games, the gambling tax rate for bingo from 10 percent to 12 percent and the gambling tax rate for interactive gambling from 12 percent to 15 percent.

The Finance Ministry expects these changes to generate an additional EUR 9.2 million in revenue, including EUR 9.025 million for the state budget and EUR 175,000 for municipal budgets.

Meanwhile, the budget is expected to raise an additional EUR 6.244 million next year by raising excise duty rates on tobacco products more rapidly.

The intention is to increase excise duties by 5 percent in 2026 and 2027, in addition to the 5 percent increase already decided, except for cigars, cigarillos and e-liquids, and to continue increasing the excise duty rate by an average of 15 percent in 2028.

The increase in excise duty on alcoholic beverages is expected to raise an additional EUR 1.278 million for next year's budget.

According to the ministry's report, the excise duty rate for the group of alcoholic beverages "other alcoholic beverages" or spirits is to be increased more rapidly - by EUR 15 per 100 litres of absolute alcohol already on March 1, 2026, and from March 1, 2028, the excise duty rates for all alcoholic beverages, including beer, will be increased by an average of 10 percent.

As reported, additional funding of EUR 565.5 million is planned for the priorities set by the government in next year's state budget - security, support for families with children and education, according to the information report "On priority measures to be included in the draft state budget law for 2026, 2027 and 2028" submitted by the Finance Ministry to the government.

The Finance Ministry informed that of this EUR 320.3 million are earmarked for security, EUR 45 million for education, EUR 94.8 million for supporting families with children and another EUR 105.4 million for other measures. Most of the additional funding for the priorities identified by the government will be provided through cuts in state budget spending.

When preparing the 2025 state budget, it was already decided to make a medium-term reduction of EUR 50 million annually in the base expenditure, the ministry noted. However, when working on the 2026 budget, a review of state budget expenditure led to the joint identification and agreement by line ministries on an expenditure reduction of EUR 171 million, which was approved by the government on August 26 this year. Further work on next year's budget has secured an additional EUR 12.4 million in spending cuts.