This research is about the excise tax on alcoholic beverages. The Law "On Excise Tax" states annual increase for all alcoholic beverages until 2018. However, the research shows that the excise duty policy of alcoholic beverages is not adequate to all categories of alcoholic beverages and should be corrected. In recent years Public Health Research and the State Revenue Service’s data shows that beer consumption is dominating and it is more than 4 times higher than strong alcohol consumption in Latvia. Prices of alcoholic beverages in Latvia is much higher than in other EU countries on if we compare it by consumer purchasing power. It is because of high excise duty, especially on strong alcohol. In addition, in Latvia there is much higher excise duties and thus the prices of strong alcohol than in Russia and Belarus, except beer, where the situation is similar. If we compare tax on different alcoholic beverages according to its impact on health (alcohol doses), we can observe that strong alcohol tax burden is much higher than tax burden of beer or wine. Calculation results show that there is a large excise tax gap on alcohol in Latvia, as well as other researches indicates a significant illegal consumption, which is mainly imported from Russia and Belarus where the prices are much lower. This directly relates to the strong spirits segment, as beer or wine smuggling not so widespread. Also, regression calculations estimates of excise tax revenues shows that increasing the excise duty on strong alcohol, their legal consumption will fall further and revenue declines. In order to maintain revenue growth, excise duty on strong alcohol should not be increased. The research results show that excise duty on strong alcohol is not adequate (compared with beer and wine). Therefore, it is recommended postpone the increase of excise duty on strong spirits but an increase of excise duty on beer can be continued in 2018 -2020.