It seems that the relentless war of lawmakers against the harmful habits of Latvians will backfire on the budget. Revenues from the excise tax on alcoholic beverages have significantly decreased, which may lead to a failure of the tax plan, warns Grani.lv.
It is no secret that alcohol producers and sellers are among the top 100 largest taxpayers in Latvia, consistently contributing to the treasury. However, the war declared by lawmakers against the green serpent, which resulted in changes to the Alcoholic Beverages Circulation Law and sales restrictions aimed at reducing alcohol consumption and lowering mortality rates, has made adjustments to this situation.
As reported by the tax consultant of the Latvian Confederation of Employers, Jānis Hermanis, in the first nine months of 2025, the revenue from the excise tax on alcoholic beverages amounted to 160 million euros. This is a significant 17 million less than planned.
In other words, the most pessimistic forecasts of the Ministry of Finance and the Ministry of Economics have come true, as they justifiably feared that the launched anti-alcohol campaign (which includes reduced alcohol sales hours, restrictions on online sales, bans on retail sales and consumption of alcohol at gaming machines, roulette, and card tables, and bans on advertising prices and discounts in the media, cinemas, and at retail points) would negatively impact the state budget.
According to the Ministry of Finance, this is the first and quite serious deviation from the forecast. This year, budget revenues from excise taxes were expected to increase to 235 million euros. But, unfortunately, everything indicates that by the end of the year, revenues may remain at the level of 2023 (around 200 million euros). This, in turn, will force the Ministry of Finance to find additional sources of compensation for the treasury. Moreover, the draft budget for 2026 includes another increase in the excise tax, which will also occur in 2027 and 2028, which is unlikely to contribute to increased revenues.
Why? Because people, contrary to the expectations of health advocates among the lawmakers, have not reduced their alcohol consumption. Apparently, they have simply switched from legal products to smuggled and counterfeit drinks. After all, at “points,” unlike stores, alcohol can be purchased around the clock, and significantly cheaper. And marginalized individuals have even recalled old, dubious recipes: cologne and lotion. The question arises — where is the benefit for the state? Having stepped on the rakes it laid for itself, it now faces the inability to maintain legal alcohol revenues and an increase in the share of the shadow market, which certainly will not benefit our budget.
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