Latvia to tap into “sin taxes” to finance culture projects

RIGA, June 12 (Xinhua) — Latvia will reinstate the so-called “sin taxes” charged on alcohol, tobacco and gambling to finance the State Culture Capital Foundation, the national endowment which sponsors culture projects, the government decided Tuesday.

Representatives of the Cabinet of Ministers said that starting in 2022, the foundation’s budget will receive three percent of excise tax on alcohol, two percent of excise tax on tobacco, 1.37 percent of lottery tax and 2.21 percent of gambling tax.

The government will continue to provide its annual subsidy to the foundation during a transition period from 2019 to 2021.

The ministers decided to change the foundation’s financing scheme after hearing the culture ministry’s report outlining four possible financing options.

According to the ministry’s report, which has been published on the government’s website, culture in Latvia needs independent funding, something Latvia’s current government has promised to ensure.

Governmental representatives said the new financing scheme would enable the State Culture Capital Foundation to organize three project competitions a year, continue its program of lifelong grants and fund projects in prioritized areas like events targeting children and youth audiences.

It would also be able to consistently increase funding to target programs aimed at supporting cultural activity in Latvia’s regions.

Representatives of Latvian creative industries have been calling for an independent financing model for the State Culture Capital Foundation for more than a decade.

The foundation used to be financed with “sin taxes” until the government of former prime minister Einars Repse abolished the system in 2004.