Analytics, Financial Services, Latvia, Legislation, Taxation

He explained that this must be done in order to maintain a stable budget. "Taking into account the additional money requested by ministries, budget revenue cannot be reduced."

The most important job the government and Saeima ought to focus on is to create circumstances to enable companies to become more competitive and thus earn more, Rimsevics said. "Instead of stripping companies from the bit of profit that still remains, they should be provided with better rules of the game. Otherwise, they are forced to move their production outside of Latvia or cease operations."

Rimsevics believes that the largest problem that curbs a competitive economy in Latvia is the education system. "We have sown nothing in order to reap money in the future," the bank's president said figuratively. Students have no exams in economy, no finals in physics and chemistry.

As reported, the Finance Ministry announced that according to the European Commission's forecasts released on May 5, "consolidation" equal to 0.4% of gross domestic product will be necessary in drawing up the 2016 national budget.

The Cabinet of Ministers approved amendments to the Law on Personal Income Tax in 2013, according to which the personal income tax rate was to be reduced to 22% in 2016.

According to the amendment, the personal income tax rate in 2014 was set at 24%, at 23% in 2015 and 22% in 2016.