Soft drinks, coffee will get more expensive

RIGA (BNS) -The government decided to back an excise tax on soft
drinks and coffee beginning in 2000.

The tax applicable to soft drinks was established as 2 lats ($3.45)
per 100 liters and the tax levied on coffee would be 0.5 lats per
kilogram.

These two taxes are expected to generate a total of 3 million lats of
additional revenue, comprising 1.1 million lats from the excise tax
on soft drinks and 1.9 million lats from the excise tax on coffee, to
the national budget.

Next year the excise tax will be levied on water and mineral water
with sugar additives or other sweeteners and aromatizers as well as
any other soft drinks, with the exception of fruit and vegetable
juices and water and mineral water without the above mentioned
additives.

In 1998 Latvia imported 35.63 million liters of such soft drinks and
24.4 million liters were produced in Latvia. The total consumption
last year was about 60 million liters of soft drinks.

In the first half of 1999 only 15.02 million liters of soft drinks
were imported to Latvia. Locally made and sold soft drinks accounted
for 18.2 million liters. The total consumption in the first six
months of this year was some 33.2 million liters of soft drinks.

The excise tax would also be applied to all kinds of coffee, whether
in beans, ground, instant or pre-mixed. In 1998 a total of 3.87
million kilograms of coffee were imported to Latvia. In the first
half of 1999 the coffee imported was 2.08 million kilograms,
including coffee (roasted and raw) imported as a raw material for
Latvian producers.

The Latvian Parliament still has to decide whether to approve the
government's decision to impose the excise tax on soft drinks and
coffee.