Financial Services, Latvia, Taxation

Even if there is a highly important priority that needs to be included in the budget, it does not mean everyone should be paying higher taxes, Reirs said.

Reirs indicated that the government wants to keep the promise that tax changes will not be debated before January 2020 or right after the adoption of the 2020 budget, which means that the tax changes might come into effect in 2021.

The government also plans to take the possible decisions on tax changes in the first half of 2020 in order not to pass tax changes simultaneously with the budget, said Reirs.

The minister admitted that in the budget context, the situation with Rigas Satiksme municipal transport company is extremely unpleasant as it prevents from providing around EUR 70 million to various priorities. Reirs plans to meet with Riga Mayor Olegs Burovs (Honor to Serve Riga, GKR) this week to discuss the situation.

According to the information provided by the Finance Ministry, Latvia’s base budget expenditure is estimated at EUR 7.13 bn for 2020 and at EUR 7.33 bn for 2021. Compared to the budget framework of the respective year, expenditure will grow by EUR 39.4 mln in 2020 and by EUR 35.7 mln in 2021.

For 2022, base budget expenditure is projected at EUR 7.49 bn, which is an increase of EUR 194.2 mln against the budget framework for 2021.

The base expenditure of the government special budget is projected at EUR 2.98 bn for 2020, EUR 3.17 bn for 2021 and EUR 3.34 bn for 2022.

Compared to the budget framework of the respective year, expenditure has been cut by EUR 24 mln for 2020 and by EUR 22 mln for 2021. For 2022, base special budget expenditure has been raised by EUR 150.9 mln against the budget framework for 2021.