Analytics, EU – Baltic States, Latvia, Markets and Companies, Society, Wages

The LCCI has prepared proposals for the declaration of the would-be Latvian government, calling on the government to create favorable environment for business so that employers could ensure real wage growth by more than 7% annually. For this to happen, real GDP has to grow faster than 5.4% every year.

The new government has to make export, increased productivity and Latvia's global competitiveness its priorities, the LCCI said, listing a number of measures that should be carried out to that end.

Latvian labor taxes should be made competitive at least in comparison with other Baltic states, purposefully moving towards creation of higher-paid jobs, and legislative amendments adopted in respect of corporate income tax and personal income tax to motivate local governments to support businesses operating in their territory.

Value-added tax (VAT) reverse charge procedure should be used in all sectors with high risks of fraud, and a low and simple tax regime should be created for beginning businesses and micro enterprises in certain business sectors or territories with high share of the shadow economy.

Other LCCI proposals call for a national budget with a surplus, starting from 2018, which would improve Latvia's global competitiveness. It is also important to improve the state aid mechanisms for supporting exports.

In order to achieve the above-mentioned objectives, monthly meetings between the Latvian prime minister, the LCCI and other major business organizations should be held.