bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 18.08.2017 | Name days: Liene, Helēna, Elena, Ellena, Liena
LatviaLatvia

Economic Diary: “Fat tax” to enrich the state treasury?

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe closer the beginning of the planning of the state budget, the more interesting things happen. It seems that the ministries have decided to approach the issue of increasing the money flow to the state treasury rather creatively. However, the abilities that will allow the government to implement its initiatives remain rather modest.

Everyone is offered to lose weight

For example, the Healthcare Ministry proposes introducing an excise tax on unhealthy food products. The products that are proposed to be put under fiscal watch are the ones that include trans fats (palm oil and margarine).

The proposals were submitted to the Finance Ministry this week. The ministry also offers to increase the existing excise taxes on non-alcoholic drinks containing sweeteners and flavourings, alcoholic drinks, tobacco products and gambling.

The Latvian Food Traders Association has negatively reacted to such proposals. According to representatives of the association believe such proposals will not only make food products more expensive, but also reduce the competitiveness of domestic manufacturers and cause millions of losses to the industry: “It was already said that increasing taxes to cover the gaps in budget is not an effective solution in a long-term perspective. It only leads to new problems.”

The first tax on fatty food was adopted in Denmark in 2011. The tax applied to foods with fat saturation above 2.3%. This increased the state budget revenue by EUR 170 million. This, however,had no impact on the overall consumers’ habits, but impacted the national industry. People started buying products in bulk in Germany instead. It was decided to cancel the “fat tax” in 2012.

Desire not correspond to abilities

Aside from the aforementioned tax, the ministries are considering the idea of additional taxing of Latvian ports. It is still unclear, however, how this idea will be formulated. It is possible that details will be voiced next week. The full list of institutions’ wishes is long (245) and could cost the budget more than LVL 500 million.

The recent assessment of the ministries’ requests regarding their compliance to the National Development Plan make things even more complicated. Because of the flwas of the algorithm, ideas like “mechanization of infantry brigade” and “patriotic education of youth” received the most support, while the initiative to create a state shares management bureau was left on the 39th spot on the list. PM Valdis Dombrovskis admitted the flaws of the system.

Government to buy out arable land

The government is not strictly focused on additional revenue. The Cabinet of Ministers Committee has recently reviewed a law that has been in production for five years the Land Management Law. This law is called to regulate the order of land management and its rational use for farms with domestic owners. The government plans to offer support through the Latvian Land Fund. A surface estimate suggests this fund will manage assets worth hundreds of million EUR.

The fund is currently a mediator-guarantee in the programme for crediting the purchase of large areas. At the same time, the term of the continuously renewed land reform will end along with the adoption of the law. This institution will become a buyer in its own right. It will then be able to re-sell or lease territories it owns.

If the Saeima approves this initiative, the state will begin active procurement of arable land in 2014 using the Latvian Land Fund. The property will then be sold to or rented out to domestic farmers. It is also planned to come up with arable land evaluation criteria.

About euro transition

Many entrepreneurs are preparing for the upcoming euro transition in Latvia. According to Swedbank’s recent survey, only 3% of entrepreneurs are doing nothing. This figure was 10% this March.

More than half of all respondents are carrying out changes in their accounting system. Many entrepreneurs are also preparing to have prices simultaneously listed in euro and lat. More than 500 companies participated in the survey. Three-fourths of its respondents believe one of the most important steps is the adoption of non-cash payment methods. 42% of respondents admit they plan to encourage their clients to use this method.

Swedbank Board member Daniil Rulev said that increased activity in regard to the adoption of non-cash transactions shows active work in introducing new electronic systems.

Ref: 017.109.109.8479


Leave a reply

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.

Indian national with fake documents apprehended on Latvian border

An Indian citizen travelling from Moscow on a bus was caught at Terehovo border control point in Latvia for presenting officers a fake EU family member’s resident card. No criminal process was launched. The person returned to the country he was travelling from.

Latvijas dzelzceļš will not have to pay dividends from last year’s profits

The government decided on Wednesday, 16 August, that Latvijas dzelzceļš will not have to pay dividends from last year’s profits, which were EUR 880,998.

Latvian citizenship provided to 103 people

The Cabinet of Ministers has issued an order to provide Latvian citizenship to 103 people through naturalization.

Estonian Inbank's profits reach EUR 5.7 million in six months

Estonian financial services' provided Inbank made a profit of 5.7 million euros in the first half of 2017, which is a 429.4% increase compared to the respective period in 2016.

Agriculture Ministry invites residents to sign up for measures to support fisheries

From 21 August onward, Rural Support Service plans to start accepting applications for projects to receive support from European Maritime and Fisheries Fund’s action plan for development of fisheries in 2014-2020 as part of projects Innovation, Productive Investments in Aquaculture and Fishing and Aquaculture project processing.