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Tuesday 20.02.2018 | Name days: Smuidra, Vitauts, Smuidris
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Coalition parties do not include all of their pre-election promises in government declaration

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAmong the 183 tasks stated in the government declaration, there are no promises regarding the reduction of VAT rate for food and division of Corporate Income Tax for municipalities, which was something promised by nearly all political parties prior to elections.

Several months prior to elections one of the hottest topics in political discussions was the possible VAT reduction for food products. All kinds of rates were offered – as low as 5%, as reported by De Facto programme of LTV.

This June, Chairman of Saeima faction of Greens and Farmers Union Augusts Brigmanis said in an interview to Sastrēgumstunda programme of LTV that «UGF had submitted an official draft to the Saeima regarding VAT reduction for food products». However, this did not mean a reduction for all products. UGF believed products of first necessity should be the cheapest.

In another television discussion on LTV, the offer to reduce VAT was 12%. This offer came from United for Latvia.

Brigmanis was one of the people who voted in favour of this: «We start with vegetables, which suffer the most from the Russian embargo. Others will have to wait for now.» One month later, the new government declaration has no mentioning of VAT whatsoever. Agriculture Minister Janis Duklavs says this: «I agree that there is no mentioning.We emphasized and continue to emphasize that the estimates provided by Finance Ministry do not seem convincing enough to not do this.»

At the same time, Finance Minister Janis Reirs claims UGF had not submitted this proposal to the list of priorities: ‘In regard to reduced VAT for food products…There was no such topic. This can be interpreted as an attempt by political parties to use pre-election promises to gain points. In reality, we have no where to get an additional EUR 200 million in a situation when predictions for this year’s budget do not come true.’

During the pre-election period, Unity offered to introduce a differentiated tax-free allowance model. This means the higher the wage the lower the tax-free allowance. All other government parties also mentioned the necessity to apply changes to the tax-free allowance. It was Unity’s proposals that was added to the important government document, not the National Alliance or UGF. «There are many points. In many of them Unity’s view is different than that of the rest of the coalition. There are points in which the division of views is the other way around. These points were added because we have agreed to make decisions on how to act after we’ve had deeper discussions,» – says Prime Minister Laimdota Straujuma.

The programme concludes that it is far more important for politicians to give promises during pre-election periods to attract voters, not rationalize on the budget capabilities. Populism disappeared once they had to add their promises in the government declaration. This is why they have not been added there. The things that have been added to the declaration are only general assumptions. The action plan will be compiled within the next month. It will include detailed work plans and estimates of their completion.

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