Global Daily Tax News, Latvia Tables Budget Implementation Law, (Oct 16, 2025)

Legislation to implement measures from Latvia's 2026 Budget was tabled in parliament on October 15, 2025.

In the Budget, the Government has announced that plans to hike taxes on the gambling sector will be brought forward one year, to January 1, 2026. These hikes entail:

• raising the annual levy on roulette, card, and dice games (for each gambling table) from EUR33,696 to EUR40,440;

• hiking the annual levy on gaming machines to EUR7,440, up from EUR6,204; and

• increasing the tax rates on bingo games from 10 percent to 12 percent, the tax rate on internet gambling from 12 percent to 15 percent, and the tax rate on gambling services offered by telephone from 15 percent to 18 percent.

Tax will also be hiked on natural resource companies, and changes will be made to the corporate tax regime to promote investments, the Government has said.

Tax relief will be provided to households through an increase to the personal tax allowance to income of EUR550 per month, and by cutting the VAT rate on essential food products, including bread, milk, eggs, and fresh poultry to 12 percent for a year from July 1, 2026.

Several changes are proposed to excise duty rates. Excise duty will be raised significantly on strong alcoholic beverages from March 1, 2026, by EUR15 per 100 liters of absolute alcohol, and from March 1, 2028, excise duty rates will be increased for all alcoholic beverages, including beer.

Excise duty rates will also rise gradually for tobacco products, heated tobacco, tobacco leaves, liquid used in electronic smoking devices and associated manufacturing inputs, as well as on tobacco substitute products. Tax increases will be implemented in 2026, 2027, and 2028, with cigars, cigarillos, and liquid used in electronic smoking devices and related inputs exempt from the hike in 2026.

From 2028, excise duty rates will rise for non-alcoholic beverages, including energy drinks and drinks with low and high sugar content. The Government will also clarify that the excise duty exemption will apply only to non-carbonated, non-pre-packed, non-alcoholic beverages that are produced by a public catering establishment or retail outlet for on-site consumption.

Finally, the Government has announced that the reduced excise duty rate for petroleum products used in free ports and special economic zones will be abolished from 2028, with the general excise duty rate to instead apply.