Business, Good for Business, Latvia, Law and Regulations, Markets and Companies, Taxation

Consequently, whether President Raimonds Vejonis promulgates the amendments to the Law on Micro Enterprise Tax that Saeima passed in November or not, the government will submit new amendments to Saeima in December stipulating that the above amendments can only take effect after a new regulation for micro enterprises is adopted.

LCCI chairman Janis Endzins told LETA that for now, the reform of the Micro Enterprise Tax will not come into effect under the latest agreement.

Kucinskis told journalists that the Economics Ministry has been ordered to work out an alternative regulation by April 2017, and that these proposals will be reviewed in the context of overall tax policy changes. The prime minister indicated, however, that the government’s plan to overhaul the regulation of micro enterprise tax has not been cancelled.

Kucinskis said that under transitional provisions that would be added to the Law on Micro Enterprise Tax the amendments providing for the abolition of the current tax regime for micro enterprises will not come into effect until a new tax regulation for micro enterprises is adopted.

"If the government fails to work out a new regulation, the enterprises will be able to operate in accordance with the existing regulation," Kucinskis said.

LCCI president Aigars Rostovskis voiced satisfaction that the current regulation will remain in place until it is replaced by a new one. “This is the main message to those operating as micro enterprises, that they can continue their work without stress,” Rostovskis said.

He said that the LCCI will work with the government to develop a regulation for small businesses that would be acceptable to the government, entrepreneurs and society. "The existing regulation for micro enterprises is a product of the crisis times and it helped many to start their businesses. The tax regime was then worked out in a hurry and it has its flaws, but they have to be corrected," the LCCI president said.

Aseradens said that the Economics Ministry would not hurry with drafting the new tax regulation for micro enterprises. He said that this work would include research, data analysis and drawing up recommendations to develop a regulation that would support both small enterprises and lifestyle businesses.

The minister said that the new regulation for small businesses will be worked out as part of Latvia's new taxation policy, which has to ready by April 1, 2017.

"I promise that we will debate the new regulation seriously and I call on entrepreneurs to listen to the government's arguments, for instance, about social tax or taxation policies in general. We will look for ways to balance the interests of the state and businesses. I hope that there will be a dialogue and we will see no further protests," Aseradens said.

As reported, Saeima passed amendments to the Microenterprise Tax Law in the final reading in late November, turning down several proposals calling for extending the microenterprise tax regime. The amendments stipulate that current microenterprise taxpayers, who will want to continue their business after December 31, 2018, will have to register as corporate taxpayers or personal income tax payers until December 15, 2018.

It was also reported that more than 250 people participated in a rally at the Saeima building, urging Saeima members not to abolish the microenterprise tax.