Budget, Financial Services, Latvia, Legislation, Markets and Companies, Taxation

The gambling tax for gambling machines and gambling tables will increase by 10%, and EUR 3 million of additional revenue is expected to be collected in 2016, EUR 6 million in 2017 and EUR 9 million in 2018.

More detailed discussions are still expected to take place on increasing the excise duty for alcohol, however, the coalition agreed that this will bring in several million euros in additional budget revenue.

Prime Minister Laimdota Straujuma (Unity) said that the additional revenue will be used for free lunches for 5th grade school children, and possibly train tickets discounts for families with at least three children.

Paradnieks also pointed out that the coalition budget task-force has basically concluded its work, and that further discussions will take place within the government.

As reported, the ruling coalition's budget task force agreed during a meeting this week that budget revenue would increase approximately EUR 120 million next year, the bulk of which would go to national security.

The task force agreed that government-run companies would pay 90% of their profits into the state budget, which would raise budget revenue by EUR 27 million. The financial stability fees will contribute about EUR 3 million, while introduction of the monthly vehicle operation tax, which will be put off for one year, is to generate EUR 30 million.

The biggest contribution will come from the so-called solidarity tax, said Sadurskis. At the moment, social contributions apply to salaries up to EUR 4,000 a month, and social contributions do not have to be paid for amounts in excess of EUR 4,000. The task force agreed on Tuesday on introducing a new tax on monthly wages exceeding EUR 4,000, which would bring in additional EUR 40.9 million, he explained.

The task force also decided that excise tax on fuel would be raised, generating an extra EUR 12.5 million in the budget. According to Sadurskis, excise tax on gasoline and autogas will be increased EUR 0.03 per liter, and tax on diesel fuel – EUR 0.01 per liter.

Excise tax on alcoholic beverages will also be raised, however, the task force has not yet agreed how much, although it is clear that the higher excise tax on alcohol will increase budget revenue by EUR 3 million.

On Tuesday, the task force agreed on measures that would increase budget revenue by about EUR 120 million, "but all these funds will be eaten up by higher national security spending," said Sadurskis, adding that EUR 61 million of the amount would go to the Interior Ministry and EUR 59 million to the Defense Ministry.