Budget, Financial Services, Latvia, Taxation

Compared to the respective period last year, the budget revenue collected by the State Revenue Service decreased by EUR 21.932 million, or 0.2%.

The Revenue Service said that budget revenue fell short of the target because of the measures taken by the government to contain the spread of Covid-19, which caused certain groups of taxpayers to scale down or suspend their business operations. 

Budget revenue generated from value added tax (VAT) fell 3.3% from the first 11 months of last year to EUR 310.048 billion, which is 11.8% short of the target.

Due to the measures introduced to curb the spread of Covid-19, revenue from labor taxes has been falling as well. In the 11 months of 2020, taxes on labor, which made up 53.4% of total revenue, reduced by 2.3% on year to EUR 4.779 billion.

Social security contributions declined 0.8% on year to EUR 3.155 billion, falling 4.5% short of the target. Personal income tax revenue dropped 5.1% on year to 1.624 billion, which was 2.9% above the target.

Excise tax revenue collected in the 11 months of 2020 came to EUR 974.427 million, which is 0.4% less than a year ago and 11.6% below the target.

Meanwhile, collection of corporate income tax increased 4.7 times on year to EUR 187.667 million, but the figure was still 22.8% short of the target.

This year, Latvia's tax revenue is projected at EUR 10.503 billion. The target for the first seven months of this year was EUR 6.009 billion.