Riga, August 10, LETA. The increase in the tax burden as a result of the tax reform in Latvia cannot be supported, Prime Minister Krišjānis Kariņš (JV) emphasized on Monday after a meeting with coalition representatives.
Kariņš promised that he would do everything in his power to hear a report prepared by the Ministry of Finance (MoF) on possible changes in the tax system next week, thus “dispelling myths” and providing complete information to the public.
The Prime Minister said that the Ministry of Finance’s proposal envisages the introduction of a mandatory, at least a minimum social payment, so that everyone would be able to request social assistance, for example, in the event of unemployment. At the same time, it is not planned to change the standard tax regime.
“There is no question of a tax increase. We have a discussion about the possibility of internal tax redistribution, because we know that three things need to be found – predictable future funding for the health sector and teachers’ salaries, as well as the Constitutional Court decision on the guaranteed minimum income, “said the politician.
In the context of the need to discuss changes in real estate tax (RET) invoked by the New Conservative Party (JKP), Kariņš pointed out that this was not discussed in the context of the reform.
“I will not support a simple tax increase, as the aim is to put the system in order,” said the prime minister, noting that burden.
The government must adopt an information report from the Ministry of Finance so that “people cannot be speculated and intimidated,” the politician stressed, acknowledging that the public lacks a deeper understanding of what is being discussed in the government.
The report prepared by the Ministry of Finance also envisages redistributing part of the social tax, as well as personal income tax in favor of financing the health sector, without increasing the tax burden on employees.
The aim of the reform is to make the tax system fairer, while ensuring that the government has tax revenues to fund all social programs in the country. Kariņš emphasized that JKP’s offer to raise the non-taxable minimum to 500 euros would mean less money for the state budget.
“We are evaluating it now. There is no question of reducing the non-taxable minimum. I am in favor of increasing it, but we have to calculate how much we can afford to increase it without deducting funds from other budget lines,” the head of government said.
Dissatisfaction with the coalition’s discussion on the quality and content of tax reforms was expressed by the Minister of Justice Jānis Bordāns (JKP), emphasizing that it was not fair to exclude any coalition partner’s proposals for reform.
“The JPP is about finding a constructive solution, but we in the government are far from that solution. The difficulty is that we see tax increases in all areas affected by the proposal,” the politician said, adding that he saw a need for a conceptual agreement on reform. At the same time, he stressed that any review of tax policy by the New Conservative Party will not be accepted unless it includes an audit of RIS rates.
Ritvars Jansons (VL-TB / LNNK), Parliamentary Secretary of the Ministry of Culture, added that the political force he represented believes that families with children cannot suffer as a result of the tax reform, so the party proposed tax reform at the same time as family state benefit reform. His party will also negotiate with the Ministry of Finance so that creative people have “fair and understandable taxes” as a result of the tax reform.
The Minister of Economics Jānis Vitenbergs (KPV LV) pointed out that a possible stimulus on the increase in excise duty on tobacco products should be discussed with the Ministry of the Interior.
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