Budget, Financial Services, Latvia, Taxation

Putra explained that the nontaxable minimum income already ensures certain progressivity, but that the Finance Ministry would be ready to move towards even greater progressivity in its proposals for Latvia’s new tax strategy.

As it is about to work out its new tax strategy, Latvia has to choose between two alternative paths - either to differentiate personal income tax rates or reform the nontaxable minimum income, Putra said. He explained that the current nontaxable minimum income system is rather complicated and that a differentiated nontaxable minimum might be simplified by setting constant rates and figures.

In Putra’s words, the issue has yet to be debated more extensively in the government, Saeima and the Budget Committee.

The Saeima Mandates, Ethnics and Submissions Committee addressed the issue today as lawmakers reviewed a public initiative calling for a progressive taxation system.