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Saturday 24.02.2018 | Name days: Diāna, Dina, Dins
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72% of Latvia’s population against tax changes

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU

72% of the respondents oppose tax changes in Latvia, believing this deteriorates their family’s financial situation, while 65% are confident it increases the overall level of poverty in the society.

Slightly more than half or 58% of the surveyed consider the shadow economy will increase and taxes will not be paid, whereas 52% of the respondents point out people will buy less – both due to the reduced income and the raised prices, because tax changes affect these two factors, indicate the latest DnB Nord barometrs data.

When assessing which governmental decisions related to the tax system changes have been the right ones, the majority (44%) of the correspondents state there are none and nothing has been done correctly in this area. At the same time, 30% of the respondents support the introduction of service vehicle tax and 15% – of capital growth tax.

Almost half of the surveyed regard the value added tax rise as one of the most unjust tax changes, while the surveyed are convinced the government made a mistake by not introducing the progressive income tax and not providing sufficient information about the scheduled tax changes.

Asked which tax rate should be reduced first, 63% of the respondents mentioned the individual income tax and the value added tax (62%). Approximately two times less (34%) respondents consider social tax has to be reduced.

On the other hand, if the economic situation in the country pressed the government to raise taxes again, the majority of  people would support the service car tax rise. Only 24% would understand the excise tax increase, but 20% would not oppose to the real estate tax increase.

Residents were also asked to evaluate what new taxes would bring benefit to both the state and the society, and it was found out, in case of necessity Latvia should introduce a tax for luxury commodities (46%), environmental pollution tax (42%), progressive income tax (37%) and tax for unhealthy food products (35%). All the stipulated taxes are covered by employers for about three-fourths of the surveyed, while taxes are paid only partially for 14% of the respondents, but 6% of the respondents and their employers do not pay taxes at all. In general, residents think taxes are too high and after paying them their income is too low (34%). Moreover, the respondents say the tax money is not used in the interests of the society (28%). These are the main reasons why people avoid taxes.

The Latvian Employers’ Confederation tax and financial expert Andrejs Jakobsons points out the tax changes in 2011 have increased the overall tax burden in Latvia, which in the short term will hinder business development and hamper foreign investment attraction. In the following years, with the financial situation stabilizing, it will be important to focus on labour tax cuts, compensating this with higher revenues from consumption and real estate. This approach would enable faster business development and provide more competitive tax conditions for jobs creation, the expert believes.


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  1. YUT says:

    Of course, no one likes uncertainty with taxes..

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