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Wednesday 20.09.2017 | Name days: Marianna, Ginters, Guntra
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BNN summary of the week: opposition in Ventspils, tax reform’s progress and growing state debt

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBNN offers a summary of this week’s topical news in a variety of categories: Business; Decline; Future; and Growth.

BUSINESS: Kucinskis promises to find decisive solution to tax reform next week

None of the coalition partners have any desire to overthrow the government. A solution to the tax reform and healthcare funding problem will be found, said Prime Minister Maris Kucinskis in an interview to 900 seconds programme of LNT.

«Yesterday I gathered all coalition representatives. The good news is that no one has any plans to topple the government and somehow stop the tax reform,» Kucinskis said.

He says he discussed with coalition partners different sources for financing healthcare and tax reform. All coalition partners agreed that it is necessary to search for solutions.

«We agreed to reach a final conclusion next week – 14 June. We have no more time for discussions – doctors and patients are waiting,» said the prime minister.

Full article here: http://bnn-news.com/kucinskis-promises-to-find-decisive-solution-to-tax-reform-next-week-166579

DECLINE: Kristovskis says work conditions at Ventspils City Council will be humiliating

«Work conditions for the opposition at Ventspils City Council will be humiliating. Still, our commitment and political experience is sufficient to deal with it,» said leader of a joint list of candidates from Unity, National Alliance and Latvian Association of Regions Girts Valdis Kristovskis in an interview to Latvijas Radio.

Commenting on the choice made by residents of Ventspils, Kristovskis said they have demonstrated their conservative position and offering trust. At the same time, voters have demonstrated that they do not value democracy, said the politician.

He admits the opposition will have to work in conditions created by the ruling power – Aivars Lembergs’ For Latvia and Ventspils. Because of that, Kristovskis says he cannot promise more than ‘following’ the completion of the work on the city council’s agenda. «The opposition cannot dictate the agenda, it can only try to achieve goals in conditions created by the ruling power,» the politician said.

Full article here: http://bnn-news.com/kristovskis-work-conditions-at-ventspils-city-council-will-be-humiliating-166524

GROWTH: Ruling coalition in Latvia may decide to put off PIT reduction

The ruling coalition plans to discuss different new proposals for compensating mechanisms in the realization of the tax reform – higher progressiveness of PIT, the option to postpone PIT reduction by six months and others.

The coalition also intends to reach an agreement next week about matters associated with tax reform and healthcare funding. Politicians have been offered multiple variants for changes. No agreement has been reached over them so far, however.

If additional compensating mechanisms are needed, the decision may be made to postpone the reduction of PIT to 20% for six months – 1 July instead of 1 January. Politicians may also discuss a more progressive PIT rate than initially planned. The current tax reform provides for two PIT rates – 20% for income under EUR 45,000 a year (EUR 3,750 a month) and income above EUR 45,000 a year.

Full article here: http://bnn-news.com/ruling-coalition-in-latvia-may-decide-to-put-off-pit-reduction-166600

FUTURE: Tax level in Latvia insufficient; state debt may increase

Fiscal Discipline Council has concluded that the current tax revenue level in Latvia is insufficient for the state needs and there are risks the state debt may increase in a long-term perspective.

A discussion was performed in cooperation with European Commission’s representation in Latvia about fiscal longevity and the role of the public sector in improving economic growth and social welfare.

Council Chairman Janis Platais said during the discussion on 6 June: «The current tax revenue level limits the country’s ability to provide high-quality public services and adequate social protection. As the quality of life increases, it is expected that there will be higher requirements for public services.»

He continues: «Clarity is needed for the range of services and social protection measures provided by the public sector in order to develop an appropriate income policy. Financing more expenses at the cost of the state debt is unacceptable.»

In the first part of talks, European Commission’s Economic and Financial Affairs General director Manfred Bergmann provided his opinion. Information was also provided by representatives of Latvian Chamber for Commerce and Industry, Latvian Free Trade Unions Association and Citadele Bank.

Platais concluded that fiscal longevity details a country’s ability to fulfil its financial commitments. Working on the fiscal longevity report, it is important to evaluate the influence the current expenses policy could have on the state debt, considering the ageing of the population and expenditures associated with that.

Full article here: http://bnn-news.com/tax-level-in-latvia-insufficient-state-debt-may-increase-166567

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