Financial Services, Latvia, Taxation

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Latvia: Work on tax reform to begin right after adoption of 2020 budget

BC, Riga, 27.08.2019.Print version
The government will get down to work on a new tax reform as soon as Latvia’s 2020 budget is adopted, Finance Minister Janis Reirs (New Unity) told LETA.

Prime Minister Krisjanis Karins (New Unity) told journalists Tuesday that at today’s meeting of the National Tripartite Cooperation Council, which brings together representatives of the government and social partners, it was agreed that taxes should remain unchanged in 2020 and that instead of changing taxes the government should think about a more efficient use of the existing funds.


The government representatives and social partners also agreed that talks on the tax changes that are to come into effect on January 1, 2021, will start not at the beginning of next year but already this year, as soon as Latvia’s 2020 budget is adopted, Reirs informed.


“The plan is to work out and adopt legislative amendments by the middle of next year, so that the public was informed about them,” Reirs said, adding that the next tax changes will also remain effective for three years.


Asked to comment on the remarks of Egils Baldzens, the leader of the Free Trade Union Confederation of Latvia, that in the context of the 2020 budget his organization intends to continue a discussion on raising the minimum wage and untaxable minimum income, as well as allowances, Reirs indicated that the social partners want to discuss these issues and not take a concrete decision in the context of the 2020 budget.


The finance minister noted that each decision will affect the budget, which is limited. A lack of a mechanism to compensate for fast reforms, for instance, would impact the municipalities in Latvia’s border areas where local residents’ income is well below the average, the minister said.







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