The base rate for cigarettes was established at 25 percent. The import tax for cigarettes from the World Trade Organization member states and countries which have free trade agreements with Latvia was set at 10 percent.
Latvia's Way MP Karlis Leiskalns explained that the 10 percent rate would be applied only if the Latvian government reaches the respective agreements with the countries which have signed free trade agreements with Latvia. If those countries do not agree, the current customs rate of 0.5 percent will be applied. There will be no customs tax for cigarettes imported from the Baltic states.
The customs duty on imported margarine would be raised from 0.5 percent to 15 percent. This rate will apply to margarine imported from WTO countries.
The current rate, however, would be retained for margarine imported from countries which have free trade agreements with Latvia. This rate would be applied to margarine imported from the European Union within the established quota of 2,000 tons per year.
Latvian dairies are worried that this law would result in falsification of origin of imported margarine.
Janis Skvarnovics, board chairman of the Central Union of Latvian Dairies, said he is worried the margarine from WTO countries would "travel and change its origin" in order to become eligible to 0.5 percent rate.
Irina Pilvere, deputy state secretary at the Agriculture Ministry, said the increased customs rates for margarine will not have any considerable effect on the amount of margarine imported to Latvia from the European Union.
Pilvere noted that the price for margarine would grow only by 0.06 lats ($0.10) to 0.08 lats per kilogram when the new, higher rates are applied. This rise was not likely to cause any considerable changes, she said.
Skvarnovics said that margarine imports could fall slightly because "the raised import duty would make the Latvian market less attractive."
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