Budget, Financial Services, Latvia, Legislation

The bill and its related legislation were forwarded to committees yesterday for review. Proposals will be evaluated next week, and hopefully, the budget will be adopted in its second and final reading December 20, writes LETA.

Consolidated budget revenue next year is projected at LVL 5.1 billion, whereas expenditures – at LVL 5.7 billion. Budget deficit, calculated according to the international ESA methodology, will be 5.5% of gross domestic product.

Tax revenue is projected at LVL 1,759,327,186 next year.

Earmarked subsidies for local governments will reach LVL 216,199,265.

The budget bill says that maximum government debt will be LVL 6 million at the end of 2011. The finance minister will have the right to underwrite loans worth LVL 162,330,168 next year.

A 1.1% inflation is forecast for next year, whereas gross domestic product is projected at LVL 13.13 billion.

Emergency funds will not exceed 0.4% of GDP next year, or approximately LVL 65 million.

Budget expenditures on utilization of European Union funds and other foreign financial aid are projected at LVL 1.167 billion.

Master budget's tax revenue is projected at LVL 1.76 billion, including LVL 939.9 million in value added tax, LVL 476.8 million in excise tax, LVL 129.6 million in personal income tax, and LVL 111.2 million in corporate income tax. Special budget's revenue from social insurance contributions is planned at LVL 1.17 billion.

During work on the budget bill for 2011, the government previously approved increasing standard value-added tax, excise tax rate on non-alcoholic beverages as of January 1 next year, as well as increasing minimum monthly wage and other budget consolidation measures.

It is currently planned that the 2011 budget will be consolidated by a total of LVL 290.67 million.

There are over 90 such bills, and most pertain to the Regional Development Ministry's becoming part of the Environment Ministry.

Other important bills pertain to amendments to laws on taxes – hiking basic VAT from 21% to 22% and hiking the reduced rate from 10% to 12%.