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Ceturtdiena 19.10.2017 | Name days: Drosma, Drosmis, Elīna
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Antane: government has set ‘checkmate’ for Latvia’s transport industry

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUWith plans to increase excise tax on fuel, the government has set ‘checkmate’ to Latvia’s transport industry and transit sector. Instead of the awaited tax revenue compensation, Latvia risks considerably reducing the competitiveness of the industry that brings in one billion euros to the economy every year, says Inga Antane, President of Baltic Association – Transport and Logistics.

«Considering that fuel price forms a very important component for railway cargo transports, up to 30% of the price – increasing costs to make Latvia’s transit corridor more expensive is insane,» Antane says.

She notes that in a situation when cargo volumes from Russia are already in rapid decline, any upward changes to the transit corridor’s costs would have catastrophic consequences for the competitiveness of Latvian ports and railway.

«When making its decision on increasing excise tax for fuel, the government should have assessed all possible risks for the country’s economy. The government also should have consulted with industry representatives before making any decisions. Unfortunately, it seems this decision was made irresponsibly and was rushed out the gate without any reason. Did the government at least calculate the effect on railway transports? How much will we lose from the possible cargo loss, and how will we compensate this loss?» Antane adds.

BATL President notes: «Trade routes are formed over decades, but such decisions risk crossing out everything that has been accomplished by businessmen in cargo attraction in previous years, as well as our God-given advantage – a favourable geographical location on the transit road map.»

Antane also notes that purely economically and from an environmental and traffic safety viewpoint, cargo transports should be diverted to the railway. «The increasing role of railway is also noted in EU’s policy. Such decisions, however, only serves to distance Latvia from this goal.»

A mathematical approach to raising budget income could play a bad joke on Latvia’s economy, as expected benefits could quickly turn into losses. «Unfortunately, the government has decided to ignore businessmen’s expressed concerns. Nevertheless, this factor will directly affect every Latvian resident’s purchasing power and welfare level,» Antane continues.

She adds that what the finance minister has said about the possibility of reviewing excise tax increase if fuel consumption were to decline does not offer much optimism. «It is basically a clear signal to investors about just how much our country’s tax system is unpredictable, where one day the rules go one direction and the next day – completely the opposite. This basically means it is impossible to come up with a long-term business development perspective in Latvia.»

BATL asks the government to review its decision to increase excise tax on fuel.

Ref: 224.109.109.6209


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