bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 21.08.2017 | Name days: Linda, Janīna
LatviaLatvia

Companies and private persons turn to Constitutional Court against solidarity tax

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUFollowing the initiative of Latvia’s Chamber for Commerce and Industry, 20 private persons and 9 companies have decided to turn to the Constitutional Court of Latvia to achieve the cancellation of the solidarity tax and recover overpaid funds.

According to plaintiffs, solidarity tax contradicts previously prepared strategies stated not only in the government’s declaration, but also development documents and different regulations that were ignored by legislators. For example, social fees cap remains frozen in accordance with the Law on Budget even though the Law on State Social Insurance still provides a clear order in which it was necessary to calculate the maximum size of the fees in 2016. It should also be added that the decision regarding the introduction of the solidarity tax does not comply with the established international rules on prevention of double taxation. This only serves to hinder attraction of investments and presents Latvia as a country that is not prepared for international cooperation and a country that does not care much for its own image.

LCCI had previously stated that this new tax would take away Latvia’s competitiveness in regards to attractive wages in the Baltic region. «If Latvia wishes to introduce a solidarity tax and thereby put a bigger burden on wage recipients, it should look at Lithuania. This country has made a decision that is completely opposite to what Latvia wishes to accomplish – establish a cap on social insurance fees for large salaries and there by motivate companies to come to country and vary the level of welfare for all residents,» – says LCCI Chairman Janis Endzins. ‘Taking that into account, it can concluded that the advice of the World Bank worth 300,000 to increase PIT to 29% will lead to a situation when wages in Lithuania that exceed a specific level will pay PIT of 15% and wages in Latvia will pay PIT of 63.09%. By making such near-sighted decisions, we will become unable to compete on not only Baltic, but also European level.’

LCCI points to the fact that Latvia has a deficit of people with large income who pay more taxes and thereby increase the country’s general level of welfare. «People who earn more money also usually spend more money and thereby stimulate the country’s economy and wage rise. We should strive to create more recipients of large salaries,» – says Endzins.

Although former Finance Minister Janis Reirs justified the need for solidarity tax with the intention to reduce inequality, it is worth keeping in mind that recipients of large wages also pay the largest taxes, this is why it would be near-sighted to put extra burden and do it in a way that prevents the person in question to receive services, including pension saving. «If the country’s goal was to prevent regressivity of taxes, it can be accomplished by cancelling the cap on social insurance fees. The largest portion of state social insurance goes to pension savings, and 2nd pension level can be managed by residents. Payers of solidarity tax do not have this option,» – said Endzins. One other unpleasant surprise is that the annotation of the law does not provide estimates of costs for state and municipal employers. This means the new tax will have to be reflected in budget income and expenditures. Otherwise the much-expected positive effect on the budget and social welfare will be exceeded, as stated by LCCI.

Ref: 102.109.109.6224


Leave a reply

Farmers Saeima: butter price will not remain high for long

The high price on butter in Latvia will not remain so high for long, said Farmers Saeima Vice-Chairperson Maira Dzelzkaleja-Burmistre in an interview to 900 seconds programme of LNT.

Aseradens elected as chairman of Unity; Krisjanis Karins to lead party’s city council faction

Unity elected Economy Minister Arvils Aseradens as the new chairman of the party. MEP Krisjanis Karins has been elected as the party’s leader in Riga City Council with Santa Zarane as his deputy.

LPS manager: forming the budget, it is important for municipal funding to stay the same

In the formation process of the next year’s state budget, it is necessary to guarantee finances do not reduce for municipalities, said the chairman of Latvian Association of Local and Regional Governments Gints Kaminskis in an interview to Latvijas Radio.

Police to organize inspections in stores; parents asked to watch their children as well

For the new school year, Riga Municipal Police will be performing regular inspections at stores, bars and cafes from 21 August to 31 August, as well as the first days of September, to make sure minors are not sold alcohol and tobacco products, BNN was told by police.

Colder masses of air to enter Latvia this week; more rain expected

This week’s weather in Latvia will be dictated by a cyclone hovering above Northern Europe. Colder masses of air will flow into the country. A lot of rain is expected in Latvia this week, as reported by State Environment, Geology and Meteorology Centre.

Kirsis asks police to assess possible forging of votes at Riga City Council

Riga City Council’s Unity faction chairman Vilnis Kirsis has asked State Police to check if the city council’s electronic voting system was used without another deputy’s knowledge or consent, said the politician.

Expert: attack in Spain shows how terrorists switched to more easily reachable targets

Terrorist attacks that transpired in Spain this week shows how terrorists have switched to more easily reachable targets, where security requirements are not as strict, says Latvian National Defence Academy’s Security and Strategic Research Centre researcher Martins Hirss.

New mandatory tests in schools to be introduced four years from now

In four years’ time – 2021/2022 school year – it is planned to introduce completely new mandatory tests in schools, as reported by State Education Content Centre Director Guntars Catlaks.

Nearly 9,000 children and their parents got homes thanks to state support programme

In the first half-year of 2017, state support helped 1,527 families in Latvia to buy homes. Compared with last year, families’ demand for state support has grown 6%, as reported by Altum finance institute.

Prediction: Aseradens will likely take control over Unity

Economy Minister Arvils Aseradens will become the head of Unity, Betsafe bookmakers predict. The possibility of Aseradens becoming the head of the party is given 45% probability by Betsafe.

Provisional estimate for next year’s fiscal space in Latvia is EUR 60 million

Next year’s fiscal space has been estimated at EUR 60 million, as noted by Finance Minister Dana Reizniece-Ozola, adding that a more precise estimate will be available at the end of August.

Reconstruction of Vilnius airport runway concludes; aircraft return to Vilnius

On Thursday, 17 August, Vilnius airport’s runway was festively opened. This was the most massive reconstruction for the airport in the past 20 years. It was a unique project for Lithuania and all of Europe, airport representatives say.

Islamic State terrorist group takes responsibility for Barcelona attack

The recent terrorist attack in Barcelona, in which a shuttle bus rammed a crowd of people on La Rambla, killing 13 and injuring at least 100, has become this week’s topic.

Weather in Latvia to be warm but rainy on weekends

The sun will appear every now and then between clouds on Friday, 18 August. Still, some rain is expected, especially in the afternoon in Latvia’s eastern regions, where thunderstorms may appear. Rain is expected to reach the capital in the afternoon. Wind will draw in from the south. Air temperature will reach +21° C… +26° C, according to State Environment, Geology and Meteorology Centre.

Latvia’s export growth was moderately rapid in the first six months of 2017

Compared with the same period of 2016, Latvia experienced a moderately rapid export growth in the first six months of 2017, according to data published by Eurostat on Thursday, 17 August.

Latvia’s annual inflation in July was one of the highest in Europe

Inflation indexes in Latvia and the UK both reached 2.6% in July, which is one of the highest indexes in the European Union, according to data published by Eurostat on Thursday, 17 August.

Kirsis withdraws his candidacy in favour of Aseradens

Riga City Council member Vilnis Kirsis has decided to withdraw his candidacy from the race to become chairman of Unity in favour of a different candidate – Economy Minister Arvils Aseradens.

Rinkevics expresses Latvia’s interest in maintaining political consultations with Palestine

On Thursday, 17 August, Latvia’s Foreign Affairs Minister Edgars Rinkevics met with the leader of Palestine’s diplomatic mission in Latvia, ambassador Taissir Al Adjouri, to discuss mutual relations between Latvia and Palestine and the peace process in the Middle East.

Putin grins to the world’s seven billionth baby, Lithuania wary of border incidents

Russian President Vladimir Putin paid a visit this Wednesday to Kaliningrad, the westernmost point of Russia, but the reports about his trip in the Russian enclave and over the border in Lithuania were strikingly different.

Survey: red considered the safest colour for a car

Most Latvian drivers consider red to be the safest colour for a car. The most popular, however, is black, according to results of a survey by Virši-A fuel trader.

airBaltic’s number of carried passengers reaches a record in second consecutive month

Latvian airBaltic airline carried 393,312 passengers in July 2017, which is 21% more than the same period last year. The number of passengers carried by airBaltic remains the highest it has ever been in the airline’s history, BNN was informed by the company.

Brivais vilnis: nearly all fish processing companies are experiencing losses

Currently nearly all fish processing companies in Latvia are experiencing major or minor losses, says Brivais vilnis chairman Arnols Babris.

American helicopters to perform low-altitude flights within Latvia’s airspace

U.S. Air Force Brigade’s Task Force Phoenix helicopters, which are stationed in Latvia as part of Atlantic Resolve operation, will be performing low-altitude flights from 16:00 to 18:00 from Lielvarde to Dobele on Friday, 18 August.

Healthcare Ministry’s state secretary Karlis Ketners may be replaced

Latvian Healthcare Ministry may replace its state secretary Karlis Ketners. It is possible he will be transferred to work at Finance Ministry, as reported by LTV.

Suspects in Europe's insecticide egg scandal before Dutch court

In the Netherlands, two men have been in court in relation to the scandal of eggs containing banned insecticide that has caused an EU-wide health scare and cost millions of euros of damages.