“The issue of taxes is not in the fog,” said the Prime Minister, emphasizing that there is a desire to prepare this plan quite clearly before revealing it to the public.
She informed that there are currently no plans to increase the value added tax. And this creates a certain challenge – to find funding for what it is promised, including reducing the labor tax burden and inequality.
“Therefore, the challenges are not small. Much work has been invested to find alternative sources elsewhere, rather than simply increasing the value added tax,” she said.
When asked how to increase the money available to local governments, whether it would be a budget grant or a new approach to equalizing local government finances, Siliņa said that new solutions regarding the local government financial equalization fund are currently unlikely.
The Prime Minister emphasized that the government wants to give the country’s economy a chance to grow, and also called on municipalities to think about how to support business.
As reported, Finance Minister Arvils Ašeradens (JV) admitted to Latvijas Radio on June 6 that one of the possibilities to cover the potentially growing defense expenses is to raise the value added tax rate by one percentage point.
On the other hand, Siliņa wrote on the social network “Facebook” that he understands very well the citizens who react to any potential changes that may affect their income or increase their expenses. Silina expects from the Minister of Finance a budget that is not created at the expense of the people and does not worsen the economic situation of the population.
The tax working group’s report will be evaluated by Silina as a whole, paying particular attention to whether the proposed changes stimulate economic activity, simplify tax payment and are proportionate.
Currently, the basic VAT rate in Latvia is 21%.
2024-08-14 06:10:01