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The increase in excise taxes on alcohol and tobacco was supported by 111 parliamentarians, 1 disagreed and 4 abstentions. Amendments still need to be signed by the president within 10 days.
Unify excise duties
According to data from the Ministry of Finance, in a 3-year perspective it is expected to increase excise duties on ethyl alcohol by 6.8 percent per year, on intermediate products, on average by 8 percent, for wine and other fermented beverages above 8.5 percent. strength, for beer – 10 percent. Although excise duties on wine and beer increased in percentage more than on ethyl alcohol, their price change will be less.
As the Deputy Finance Minister Rūta Bilkštyt señala points out, such a constant increase in excise duties is aimed at avoiding sudden price spikes and avoiding a negative impact on the business environment.
The reform of the law also provides for the application of different tax benefits to breweries depending on their size.
It is planned to consider a small brewery as one that produces no more than 80 thousand. hectoliters (100 liters – past aut.) of beer and recognized as legally and economically independent from any other brewery according to criteria established by the Government or its authorized body (unless the volume of beer jointly produced by these breweries during a calendar year does not exceed 80,000 hectoliters) and the company’s production facilities are physically separated from any other brewery.
«The exemption from the special tax referred to in this section shall not apply to beer produced under license agreements. The excise duty exemption referred to in this paragraph shall not be considered mixing and / or bottling of beer produced in another brewery. The procedure for the application of this benefit will be established by the Government or an institution authorized by it ”, the bill to reform the law is attached.
“Reduced excise duties apply to independent kraft beer producers in most European Union countries. It should be noted that kraft breweries create relatively more jobs than large city-based breweries.
With the establishment of kraft breweries, more jobs, guides, excursions, tourism will appear in the regions ”, says Mykolas Majauskas, chairman of the Budget and Finance Committee of the Seimas.
Tax alternatives
Under the current proposal, the excise tax on cigarettes will also increase starting in the New Year. The price of a pack of smoking tobacco will increase by 0.17 euros in 2022 due to increased excise duties, and by 0.55 euros in three years. Heating of tobacco products (including alternative products), counting 20 units. the excise tax next year will cost 0.27 euros and for three years a total of 1.09 euros.
The price of the liquid electronic cigarette will increase by 0.07 euros from next year and by 0.42 euros in three years. Taxes on a pack of cigars and cigarillos will increase by 0.27 euros next year, and 0.97 euros in three years, reports the Ministry of Finance.
Over a three-year period, in order to reduce the availability of tobacco products, it is planned to increase the rates of excise duty on cigarettes at a slower pace than before, by 6-7% each. annually, for cigars and cigarillos, by 20% each, for smoking and raw tobacco, by 7.8% each, and for smoking tobacco and its alternative products, by 32%, announces the Ministry of Finance.
“Weaker incandescent products (with or without nicotine) would be taxed in the same way as stronger incandescent products. This would help reduce accessibility, especially for young people, and reduce direct substitutability.
To date, all cigarettes are subject to the same excise duty, regardless of their concentration and content of tobacco and nicotine. Both heating tobacco products and cigarettes, regardless of their strength, are sold in packs of 20 units each, so all alternative heating products are taxed in the same way as cigarettes, ”said Deputy Minister R Bilkštytė.
According to the calculations of the Ministry of Finance, due to the modified excise taxes, the state budget would already receive around 29 million. additional revenue of more than 104 million euros over the three-year period. euros.
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