2019.06.26 16:31

Lithuania won't get into 'excise wars' with Estonia, Latvia, finance minister says

BNS 2019.06.26 16:31

Lithuania has no intention of following in the footsteps of Estonia and Latvia by cutting excise taxes on alcohol, Finance Minister Vilius Šapoka said. 

"At the moment, we are not discussing any significant excise policy changes. We are not going to get involved in the verbal tussle between Latvia and Estonia over excise duties," Šapoka told BNS. 

"I don't think that excise wars have ever brought long-term benefits to anyone," he added.

In excise policies, short-term plans must be outweighed by long-term objectives, especially when it comes to products that have an impact on public health, according to the minister. 

"Increased availability and consumption of alcohol costs tax-payers much more in the long run," he said. 

In a bid to curb increased trade in alcoholic beverages at the border with Latvia and to lure Scandinavian tourists, Estonia is cutting excise tax rates on alcoholic drinks by 25 percent in July.

In response, the Latvian parliament decided last week to reduce the excise duty on strong alcohol by 15 percent.

Latvian Prime Minister Arturs Krišjānis Kariņš said on Wednesday that the Baltic countries should have the same excise tax rate on alcohol.

He said this would allow Latvia, Estonia and Lithuania to use excise taxes as an instrument in the fight for public health instead of engaging in "unnecessary wars". 

Lithuania substantially increased excise tax rates on all alcoholic drinks in March 2017 and further raised the duty on strong beverages in March 2019.