Saeima committee agrees on slower rise of excise tax on soft drinks

  • 2020-01-21
  • LETA/TBT Staff

RIGA - The Saeima Budget and Finance (Taxation) Committee today agreed to set a lower excise tax rate on sweetened non-alcoholic beverages than approved in previous readings of the draft legislation. 

Under the previously endorsed draft amendments, excise tax on 100 liters of soft drinks would be calculated based on three different rates depending on sugar content. For soft drinks with sugar content of up to 5 grams per 100 milliliters the exercise tax rate would be EUR 7.4 per 100 liters, for soft drinks with sugar content of 5 to 8 grams per 100 milliliters the tax rate would be EUR 10 per 100 liters and for non-alcoholic beverages with sugar content exceeding 8 grams per 100 milliliters the tax rate would be EUR 30 per 100 liters. 

Non-partisan Saeima member Julija Stepanenko together with a group of other opposition lawmakers tabled a proposal, which effectively meant a return to the previous tax rate - EUR 7.4 per 100 liters of soft drink. Stepanenko said that the proposal was a response to calls for a steep rise of excise tax on sweetened non-alcoholic beverages. 

The lawmaker argued that the consumption of soft drinks in Latvia was not that high and that these beverages are already taxed in Latvia. 

"The politicians who scrapped free school meals have no moral rights to talk about children's health," Stepanenko said, adding that it is not relevant to discuss children's health in the context of this bill. 

Representatives of the Finance Ministry indicated that the debate on the so-called "sugar tax" should take place as part of the debate on general tax reforms.

Janis Eglitis, head of Agriculture Minister Kaspars Gerhards' (National Alliance) office, reminded the Finance Ministry's call for a slower rise of the excise tax on soft drinks, noting that the consumption of the sweetened beverages is not growing in Latvia.

Gerhards' proposal provides for charging EUR 7.4 on non-alcoholic beverages with up to 8 grams of sugar per 100 milliliters and EUR 14 on beverages with higher sugar content. 

For Development/For, meanwhile, proposed to charge EUR 7.4 on non-alcoholic beverages with up to 8 grams of sugar per 100 milliliters and EUR 20 on beverages with higher sugar content. 

In the vote, the Saeima committee rejected the tax rates proposed by For Development/For and approved Gerhards' proposal, which now is likely to pass the final reading in Saeima.