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2019.10.17 10:30

Lithuanian cabinet approves alcohol, tobacco, diesel fuel excise tax hikes

BNS2019.10.17 10:30

The Lithuanian Cabinet decided on Wednesday to raise the excise duties on strong alcohol, diesel fuel and heated tobacco in March 2020. 

Finance Minister Vilius Šapoka says the excise duty hikes aim to expand the base of taxes less detrimental to economic growth, and to promote a healthy lifestyle.

"The price per 20-unit pack of heated tobacco products could increase by around 33 (euro) cents," Šapoka said at the Cabinet meeting on Wednesday.

The tobacco excise tax hike is expected to generate around six million euros in additional budget revenue annually, he said.

The excise tax rates are set to increase by 68 percent for heated tobacco (from the current €58.6 to €113.2 euros per kilogram), by 10.5 percent for ethyl alcohol, by 7.3 percent for gasoline, by 7.2 percent for diesel fuel, and by 44.6 percent for diesel fuel used for agricultural purposes.

The excise duty hikes are expected to bring in a total of €53.5 million in additional budget revenue, including €34 million from the tax on diesel fuel, €6.5 million from diesel fuel used by farmers, and €10 million from ethyl alcohol.

The ministry estimates that hikes will lead to average price increases of around €0.45 per 0.5 liter of strong alcoholic drinks, €0.04 per liter of gasoline, and €0.03 per liter of both diesel fuel for general use and that for agricultural purposes.