REPUBLIC OF LITHUANIA                                           
                               LAW                                              
                               ON                                               
                          EXCISE TAXES                                          
                                                                                
     Article 1. Objective of this Law                                           
                                                                                
     This Law  shall regulate  the imposition  of excise  tax  on               
certain goods.                                                                  
                                                                                
     Article 2. The Taxpayers                                                   
                                                                                
     Excise taxes  shall be  paid into  the budget  by legal  and               
natural persons  as well  as enterprises  without the  rights  of               
legal person  which are  the manufacturers and importers of goods               
specified in Article 3.                                                         
                                                                                
     Article 3. The Object of Excise Tax                                        
                                                                                
     The following goods shall be subject to the excise tax :                   
     1) ethyl  alcohol,  undenatured,  and  alcoholic  beverages,               
including beer;                                                                 
     2) smoking tobacco and tobacco products;                                   
     3) coffee, chocolate and food preparations containing cocoa;               
     4)  jewelry,   gold  and  silverware,  excluding  artificial               
jewelry and coins;                                                              
     5) engine  petroleum, excluding  aviation petroleum,  Diesel               
fuel;                                                                           
     6) luxurious cars;                                                         
     7) electricity;                                                            
     8) publications of erotic and violent nature.                              
                                                                                
     Article 4.Taxable Value                                                    
                                                                                
     The taxable value shall be:                                                
     1) of  goods made in the Republic of Lithuania - the selling               
price of goods exclusive of VAT;                                                
     2) of  import goods  -  customs  value  of  goods  including               
customs duty;                                                                   
                                                                                
     Article 5.Taxable Turnover                                                 
                                                                                
     Excise taxes  shall be  calculated on  goods referred  to in               
Article 3 hereof, which are :                                                   
     1) delivered from the warehouse of finished goods to another               
legal or  natural person or an enterprise without the rights of a               
legal person,  to whom the right of disposal is assigned pursuant               
to the  issued transfer  documents. Such  documents must  contain               
mandatory requisites  provided for  in Article 10 of the Republic               
of Lithuania Law on the Principles of Accounting;                               
     2) imported when they are delivered for customs procedure.                 
     Excise tax  is an  element of the price of goods and thus it               
is not stated in the invoices and payment documents.                            
                                                                                
     Article 6. Excise Tax Reliefs                                              
                                                                                
     Excise tax shall not be imposed on:                                        
     1) import  goods which  are  exempt  from  customs  duty  in               
accordance with  the procedure  set forth  in Article  5  of  the               
Republic of Lithuania Law on Customs Tariffs;                                   
     2) unbolted  alcoholic beverages  and  their  raw  material                
provided that  they are imported by state-owned enterprises which               
have the licence to produce alcoholic beverages,                                
     3) exported goods.                                                         
     Excise tax shall not be imposed on ethyl alcohol provided it               
is sold to :                                                                    
     1) the  enterprises of  the Republic  of Lithuania  for  the               
production of  vodka, liqueur,  trauktine (kind  of brandy), mead               
and vinegar;                                                                    
     2) pharmaceutical  enterprises and  medical institutions for               
medical  and   pharmaceutical  purposes;   enterprises  producing               
veterinary medicines  and to  veterinary supply  enterprises  for               
veterinary purposes.                                                            
                                                                                
     Article 7. Tax Period                                                      
                                                                                
     The tax  period of  excise tax  ( excluding  excise taxes on               
import goods)  shall be a calendar month, at the end of which the               
taxpayers must,  before the  15th day  of the next month, file an               
account of excise taxes to the local State Tax Inspectorate.                    
                                                                                
     Article 8. Payment Procedure                                               
                                                                                
     For local-made  goods excise  taxes must  be paid  into  the               
budget before the 30th day of the following month.            The               
taxpayers whose  average monthly  sum  of  excise  taxes  in  the               
preceding month exceeded 50 000 Lt shall pay excise taxes:                      
     by the  30th day  of the month - for the first decade of the               
month;                                                                          
     by the 10th day of the next month - for the second decade of               
the month;                                                                      
     by the 20th day of the month - for the remaining part of the               
month.                                                                          
     For import  goods the  excise tax  shall be  paid  into  the               
budget in  accordance with  the  procedure  established  for  the               
payment of customs duties.                                                      
     The unpaid  excise tax  shall be  recovered by the State Tax               
Inspectorates without suit and the overpaid sum shall be refunded               
for the current year and the five preceding years.                              
                                                                                
     Article 9. Sanctions for the Violation of this Law                         
                                                                                
     If in  the excise  tax account an amount of tax is less than               
the correct sum of excise tax, a deficiency and the penalty equal               
to such deficiency shall be recovered.                                          
     If the  taxpayer failed  to file  excise tax  accounts,  the               
concealed sum  of excise  tax and a penalty equal to 200% of such               
sum shall be recovered.                                                         
     Upon failure  to pay  excise taxes  when due, the unpaid tax               
shall bear an interest at the rate of 0.3% for each overdue day.                
                                                                                
     Article 10. Final Provisions                                               
                                                                                
     This Law shall come into effect on 1 May 1994.                             
     The Government of the Republic of Lithuania shall establish:               
     1) the  procedure for  the calculation and payment of excise               
taxes;                                                                          
     2) list  of  taxable  goods  according  to  the  established               
description and coding system of goods, and the excise rates;                   
     3) the procedure for the attribution of cars to the category               
of luxurious cars.                                                              
     The Government of the Republic of Lithuania, on the basis of               
Article 3  hereof shall, by 1 January 1997, establish the list of               
goods subject  to excise  taxes and rates thereof.  List of goods               
subject to  excise taxes  beginning from  1997 and  rates thereof               
shall be approved by the Seimas of the Republic of Lithuania.                   
                                                                                
     I promulgate  this Law  passed by the Seimas of the Republic               
of Lithuania                                                                    
                                                                                
                                        ALGIRDAS BRAZAUSKAS                     
                                             President                          
                                             of the Republic                    
                                                                                
Vilnius                                                                         
12 April 1994                                                                   
No.I-429                                                                        
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