Min­i­mum wage, ex­cise tax on fuel to be dis­cussed after tax pol­icy guide­lines are en­dorsed

The Baltic Times - - OUR COMMENTARY - BNS/TBT Staff

The govern­ment is plan­ning to pass the main tax pol­icy prin­ci­ples on May 3, but dis­cus­sions about a num­ber of spe­cific is­sues - the min­i­mum wage, ex­cise tax on diesel fuel and to­tal bud­get deficit - will con­tinue, Prime Min­is­ter Maris Kucin­skis (Greens/farm­ers) told re­porters after a meet­ing with the Bank of Latvia Gov­er­nor Il­mars Rim­se­vics has said.

Two months have passed since the Bank of Latvia pre­sented its tax pol­icy strat­egy that largely served as the ba­sis of the Fi­nance Min­istry’s tax re­form, said Rim­se­vics. How­ever, many things have changed since that time.

The Bank of Latvia has con­cluded that, if there is no cer­tainty about the max­i­mum bud­get deficit, it would not be right to mix up the tax strat­egy with spe­cific bud­get fig­ures for 2018. The cen­tral bank rec­om­mended the prime min­is­ter to go ahead with the real tax pol­icy prin­ci­ples con­cern­ing changes to per­sonal in­come tax, cor­po­rate tax, ex­empt­ing rein­vested profit from taxes and others. The other pro­pos­als should be dealt with after the max­i­mum bud­get deficit level be­comes clear at the end of May, said Rim­se­vics.

The Bank of Latvia rec­om­mends the govern­ment to tem­po­rar­ily put off dis­cus­sions about pro­pos­als that con­cern so­cial se­cu­rity, non­tax­able min­i­mum in­come, lack of funds in health­care, and others.

On the other hand, Kucin­skis said that he and Rim­se­vics had agreed that the main tax pol­icy prin­ci­ples would be re­viewed and passed by the govern­ment on Wed­nes­day. He con­firmed that some mat­ters would be taken out of the tax pol­icy and dis­cussed later. “Some of the is­sues will only be fi­nal­ized after we har­mo­nize them with the Euro­pean Com­mis­sion and know the per­mis­si­ble bud­get deficit level,” said Kucin­skis.

He ex­plained that the govern­ment must not hurry with de­ci­sions that may be over­turned by the Euro­pean Com­mis­sion. If that hap­pens, the govern­ment will have to con­sider other op­tions that have not yet been dis­cussed, for in­stance, in­creas­ing value added tax. “Rais­ing VAT is not on the agenda at the mo­ment, and I hope that we will not have to dis­cuss it,” said the premier.

“We have to know what bud­get deficit we can af­ford. Ac­cord­ing to the cur­rent pro­posal, it could be 170 mil­lion Eu­ros, but we have to be ab­so­lutely cer­tain that we can af­ford it,” ex­plained Kucin­skis. Also dis­cussed will be rais­ing the ex­cise tax on fuel, and the ef­fect of the tax re­form on di­rect pay­ments to farm­ers.

Dis­cus­sions about the min­i­mum wage will also con­tinue after the govern­ment knows the bud­get deficit for 2018. “I very much hope that we will not have to go back on what has been promised, but that will only be clear after Saima en­dorses the en­tire tax pol­icy,” added Kucin­skis.

And yet, the tax re­form will be “in the in­ter­ests of the com­mon man” as the govern­ment is not plan­ning to re­vise its de­ci­sions re­gard­ing the per­sonal in­come tax rate and non-tax­able min­i­mum in­come, Kucin­skis em­pha­sized.

Newspapers in English

Newspapers from Latvia

© PressReader. All rights reserved.