sign up

< Back to Heated Tobacco Products Tax Gap Map

Tax Gap of Heated Tobacco Products in Latvia

In December 2015, the excise tax law (No 367/Lp12) was amended to create a new tax category for heated tobacco, which went into effect in July 2016. Heated tobacco is defined as “industrially processed tobacco which is prepared to distill steam which contains nicotine, without burning process.” From Jan 1, 2016 and until Jan 1, 2021, the excise tax on heated tobacco was EUR 70 per 1,000 grams, the same rate as other tobacco products. The law on excise duty was amended on Nov. 24, 2020. Starting January 1, 2021, the specific excise tax rate is scheduled to increase to EUR 160 per 1,000 grams, diverging from the category of “other smoking products”. The rate will continue to increase to EUR 207 per 1,000 grams from January 1, 2022, and to EUR 218 per 1,000 grams on January 1, 2023. 

Latvia applies a mixed excise tax system with a minimum excise tax to cigarettes. As of July 2020, the specific excise was EUR 78.7 per 1000 sticks, the ad- valorem rate was 20% of the retail price, and the minimum excise was of EUR 114.7 per 1000 sticks. The specific excise is scheduled to increase starting March 1, 2021 to EUR 92.5 per 1000 sticks, but the ad-valorem excise will decrease to 15% of the retail price. The minimum excise duty increases to EUR 121.4 per 1000 sticks. After that year, the ad-valorem will remain the same, while the specific excise (and minimum excise) will increase to EUR 98 per 1000 sticks EUR 128.4 per 1000 sticks for the minimum excise) starting January 1, 2022, and to EUR 104 per 1000 sticks (EUR 135.9 per 1000 sticks for the minimum excise) starting January 1, 2023.

Sources

Last Updated Feb. 22, 2021