On Thursday, 9 December, the Saeima passed in the first reading amendments to the Law on Excise Tax. The goal of these amendments is reducing excise tax for natural gas, improving accessibility of gas refuelling stations for vehicles powered by gas, as well as developing gas infrastructure.
The goal of amendments to the Law on Excise Tax is replacing the previous state support mechanism in accordance with de minimis regulation on the general reduced tax rate and thereby continue promoting reduction of greenhouse gas emissions in transports and gradual transition towards environmentally friendly fuels. It will also help improve accessibility of gas refuelling stations for gas-powered cars and further develop gas infrastructure.
The legislative draft provides for reducing the excise tax rate for natural gas used by vehicles until 31 December 2025. The draft also states that the regulation in accordance with which the excise tax rate for vehicle fuel remains at 1.91 EUR/MWh or EUR 20 per 1 000 m3 will remain in place until 2025, as well as replacing the previously outlined state support form with a general reduced tax rate of 1.91 EUR/MWh or EUR 20 per 1 000 m3.
It is also planned to coordinate with the European Commission to make sure this tax reduction is not considered as support from the state.
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The legislative draft will come to force once a decision from the European Commission on compliance of this support mechanism to EU’s domestic market has been received.
Latvian parliament passes reduced excise tax rate for natural gas
