Business, Financial Services, Latvia, Taxation

At Thursday's meeting, the government heard the State Revenue Service's report on downtime payments to the employees idled by the Covid-19 crisis and problems related to these crisis benefits. According to the Revenue Service's report, the average monthly social security contribution made per employee  in 2019 was EUR 273.7, while businesses paying micro-enterprise tax paid EUR 98.86 per employee. 

Prime Minister Krisjanis Karins (New Unity) noted that the existing tax system has effectively legalized the situation where many people are left without social protection. Karins proposed to address the issue in the context of planned tax reform. 

"The attitude of public administration and people have to change. If we do not change in this crisis, we will find ourselves in a similar situation when the next crisis strikes," the prime minister said. 

To tackle the problem reported by the Revenue Service, the government tasked the Welfare Ministry with working out a conceptual solution for minimum social security contributions and submit it to the Finance Ministry by April 28. 

The Finance Ministry will have until April 30 to include the proposal into draft legislation on tax reforms.