Financial Services, Latvia, Taxation

Mandatory social insurance contributions increased by 4% as compared to October 2019. "This proves that the earlier forecast, which said that the lowest tax revenue could have been reached in May, has proved accurate. Residents, who have become more optimistic about their financial situation, are making purchases they put off at the beginning of the crisis, thus improving the collection of both consumption taxes and other taxes," said the Fiscal Discipline Council.

At the same time, the report states that value added tax revenue is still short of target, with 87.1% of the projected revenue collected in October. "The collection of other taxes is also short of target, except for personal income tax, which exceeded the projection by 6.6% in October," the council said.

The Financial concludes that the overall tax revenue projection will not be achieved this year, as in October, for instance, 89% of the projected tax revenue was collected.

"Relatively good tax revenue could be related to both the improvement of the economic situation and changes in the structure of consumption - because of Covid-19, expenditures on entertainment, restaurants, tourism have decreased, but purchases of goods and fuel consumption have increased," said the Financial Discipline Council.