Budget, Financial Services, Latvia, Taxation

In the first seven months of this year, general government revenue totaled EUR 6.664 billion and expenditure EUR 6.658 billion, forming a EUR 6.2 surplus in the budget.

The Finance Ministry said that tax revenue were considerably lower than planned due to the Covid-19 pandemic, while the support measures for reducing consequences from the pandemic and increase of social benefits resulted in a steeper growth in consolidated budget expenditure, and as a result, surplus in the budget is by EUR 591 million lower than in the respective period last year. The consolidated budget revenue in the first seven months of this year were by EUR 133.2 million or 2% lower than in the respective period last year.

Value added tax revenue in the first seven months of this year was by EUR 109.1 million or 7.5% lower than in the respective period last year, excise tax was by EUR 24.7 million or 4% lower, social insurance contributions were by EUR 32.7 million or 2% lower, personal income tax revenue was by EUR 14.9 million or 1.5% lower year-on-year.

In the reporting period only corporate income tax increased by EUR 114.4 million. The ministry explains this with the low corporate income tax revenue in the respective period last year as a result of the tax reform.

As reported, the tax revenue collected in Latvia in the first half of 2020 fell EUR 426.6 million or 9.3% short of the target.