March 31, 2023
All of the stated budget requirements cannot be met with the amount of taxes currently collected in Latvia. As stated by Minister of Finance Arvils Aeradens in a press conference, all 14 current taxes will be discussed when formulating the Tax Policy Guidelines for 2024–2027.
All current taxes will be reviewed, the minister stated. Political and social allies’ offers will also be taken into consideration. The coalition and social allies prioritize labor taxes, according to Aeradens. In upcoming discussions, New Unity intends to put forth a sustainable healthcare funding strategy.
Aeradens is unsure of how talks will turn out right now. The discussion of labor taxes, he added, would be the most challenging.
The business income tax may also see modifications. The social security tax and the issue of residents’ revenue declaration will also be covered by the government.
The minister stated that 2.7% of tax revenue came from business income tax following the 2018 tax reform. The tax income in Estonia is roughly 10%. Such a small contribution from companies, according to Aeradens, cannot last for very long.
Additionally, he stated that Latvia’s tax income represents 30.8% of GDP, compared to Estonia’s 33.8%.
«For a very long time, we have been stuck at a 30% level, which is insufficient to meet all of our requirements. With such a financial burden, we won’t accomplish anything,» declared Aeradens.
Previously, the minister informed LETA that the government declared plans to begin work on the tax policy guidelines as soon as the state budget for 2023 was finished. Government-forming parties concur that tax policies should be reviewed once every election term. Usually, only one or two fees are altered. Entrepreneurs are then informed of the adjustments. The largest tax reforms could occur in 2025.
There are members of the Tax Policy Coordination Group. Its goal is to create the Tax Policy Guidelines for 2024–2027 in collaboration with the government’s social and cooperative allies.
Source: BNN NEWS
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