Financial Services, Latvia, Markets and Companies, Taxation

Artis Kampars.

The minister believes that such a rate would stimulate not only the creation of new enterprises and the solution of the country's unemployment problems, but would also result in a reduction of the proportion of the shadow economy.

As Kampars indicated, this proposal for a reduction in the tax rate, along with other proposals on microenterprise taxes, has been submitted to the relevant Saeima committees for examination.

The minister hopes that the proposed bill on microenterprise taxes will be approved by the Saeima in the near future, and with this it will be possible to implement a full support program for microenterprises.

"We are trying to find a compromise so that everything is in order in terms of the Constitution," indicated the minister, adding that "if we wish to work, then this is an easy tax to administer, almost two times lower than what businesses are currently paying."

On April 29, the Saeima gave conceptual support to a bill on microenterprise tax which foresees a fixed tax payment of 20% of annual turnover for this type of business. The new law is planned to come into force on July 1, 2010.

Meanwhile, the Saeima's Budget and Finance Committee, while examining the bill, after long discussions agreed to set a tax rate for microenterprises of 9%.

At present, Latvian legislation does not define a special status for microenterprises and does not set them a separate tax rate.