bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 28.05.2017 | Name days: Vilhelms, Vilis
LatviaLatvia

Economic Diary of Latvia. Sanctions, taxes and keeping promises

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThis week is notable mostly because of a preliminary piece of news that Russia may decide to lift its embargo on imports of fish products in Latvia in the next two weeks.

This piece of information came as a result of a visit by Latvian Agriculture Minister Janis Duklavs and Director General of Latvian Food and Veterinary Service Maris Balodis to Moscow. Latvian officials, met with Russian Agriculture Minister Aleksandr Tkachev in order to discuss ways of resolving the sanction war aimed at Latvian fish processing companies.

After the talks, Janis Duklavs announced the discussion was constructive. The two sides agreed that Latvia will provide Russian supervisory authorities additional information, including translated versions of some of the previously sent documents. According to the minister, Russian colleagues have promised to review the information quickly. If need be, Russian officials will ask additional questions to companies in which violations have been found. Once the Russian side receives the necessary information from Latvia and reviews it, it will be possible to discuss the matter of lifting the temporary ban on imports of Latvian canned fish products, said Duklavs.

Practically on the same day of Duklavs making this announcement, Aleksandr Tkachev said that Russia is prepared to lift the ban on Latvian fish products in two weeks’ time – after a detailed review of received information. «If no violations are noted, restrictions will be lifted,» – said Tkachev.

As previously reported, the ban on imports of Latvian and Estonian fish products was established by Russia on 4 June 2015. The reason for this embargo was Rosselhaznadzor’s uncovered systematic violations in the labeling of fish products and exceeded levels of benzopyrene concentration.

With a delay to the plan

According to the head of Latvian State Revenue Service Inara Petersone, Russian sanctions aimed at products imported from Europe have impacted tax administration in Latvia. This can potentially delay talks in regard to the country’s next year’s budget.

According to SRS’ report for the first half-year of 2015, tax administration is currently below expectations. The state treasury was expected to raise EUR 4.08 billion in the first seven months of 2015. In reality, only EUR 4.05 billion have been collected in the aforementioned period.

VAT administration was previously planned at EIR 1.1 billion. In reality SRS has managed to collect only EUR 1.07 billion. Nevertheless, compared with the first seven months of 2014, VAT administration has grown by 3.8%.

Corporate Income Tax administration is currently at EUR 222.57 million, which is 5.2% more in comparison with the year before, but still EUR 4.95 million below the plan. Social insurance fees for the first seven months of 2015 are behind the plan by EUR 3.66 million (at EUR 1.35 billion). Non-tax administration is EUR 8.18 million behind the plan (at EUR 246.23 million).

PIT is actually ahead of the plan – EUR 822.94 million in comparison with EUR 822.1 million. Excise tax amount is currently at EUR 445.56 million as opposed to the originally planned EUR 433.81 million, as reported by SRS.

Internal and external security, education and medicine – some of the most expensive fields – will be the main priorities of next year’s budget. The first meeting of the coalition work group for the development of the budget for 2015 was held this week. According to Finance Minister Janis Reirs, the budget will be based on expectations that GDP will turn out 3%, deficit will not exceed 1% and consumer prices will grow 2%.

Banks fail to keep their word

In a state of sanction war, declines in collected taxes and the necessity to invest more and more money into defence and security, the matter related to the role of credit institutions in the development of national economy has been put up for discussion.

As reported by Economy Minister Dana Reizniece-Ozola, coalition parties plan to discuss the situation with the allocation of loans. On 7 August, partners of the coalition plan to listen to the report of the Finance and Capital Market Commission and governors of the largest banks about trends in loans of households and the commercial sector.

Previously, the minister had landed criticisms on banks, saying that their policy hinders economic growth. She described their policy as very poor.

Reizniece-Ozola reminded that while the Saeima was discussing the adoption of ‘left keys’ principle in mortgage loan services, banks were actively calling for a refusal of such changes, promising to renew lending services. Now it seems that politicians have kept their word and banks have not.

Ref: 017.109.109.2624


Leave a reply

BNN summary of the week: Estonian minister disapproves of NATO; Latvia’s tax system lags behind

BNN offers a summary of this week’s topical news in a variety of categories: Business; Change; Future; Decline; Truth and Growth.

Municipal elections 2017: what do people say?

With municipal elections gradually coming close, BNN offers a compilation of opinions provided by experts from different industries. Short answers consist of thoughts about specific municipalities that affect respondents directly, and municipal administrations in general – what people expect from officials and what changes they expect from elections.

Trade of natural gas to legal clients in Latvia commences

Trade of natural gas to legal clients in Latvia has commenced. Latvenergo’s Elektrum product offers fixed-price contracts for 12-month supply period. The first gas supply contracts have been signed with clients in Latvia, the company reports.

Murniece: the biggest strength of Latvia’s parliament is public involvement

The biggest strength of Latvia’s parliament is the involvement of the public in resolution efforts of matters associated with child and women’s rights, the rights of disabled people, as well as security, tax policy and the European Union, says Saeima speaker Inara Murniece.

Corruption on decline in Lithuania, yet still remains troublesome

To wrap up the findings of a new corruption research ordered by the Special Investigation Service, an institution dealing with financial crimes in Lithuania, the situation is largely improving, yet not as fast as the service wishes.

Ventspils signs agreement with Chinese-Belarusian industrial park Great Stone

Vetnspils Freeport Authority and Ventspils High Technology Park signed an agreement yesterday with Chinese-Belarusian industrial park Great Stone, which is the largest infrastructure development project in Belarus, as reported by the freeport’s representatives.

Resignation filed by arrested Tallinn Deputy Mayor

The Deputy Mayor of the Estonian capital has stepped down from office after being arrested as part of a criminal case into violations of procedural restrictions of Tallinn procurement tenders.

Residents: situation in Latvia is developing in a wrong manner

54% of residents believe the situation in Latvia is currently developing in a wrong manner. A similar situation is noted in relation to the evaluation of the government’s work. 75% of respondents are critical about the government’s work. Only 17% of respondents are positive about the government’s work, according to results of Baltic International Bank Latvian Barometer.

Finance Minister: we have to be ready for flexibility in the reform plan

Currently we have to progress forward with the intended tax reform and prepare for a degree of flexibility, says Latvian Finance Minister Dana Reizniece-Ozola.

Zarins: unlike healthcare workers, Latvia’s roads are crumbling silently

Saeima deputy Ivars Zarins has submitted a proposal that offers restoring State Roads Fund and providing it with funding of 80% of excise tax for oil products. It is also proposed to divert income from vehicle operation tax and road use fee.

Price of oil slides 5%, though exporters decide to uphold production restrictions

Oil price has dropped by around five percent, even though oil-exporting countries have decided to maintain production limits until spring 2018.

Experts: role of free trade agreements to increase – especially with Asia

Latvian businessmen are already sufficiently active in several Asian markets. Their experience shows – these markets have great potential, according to representatives of the European Parliament’s Information Bureau.

Trump steps up pressure on NATO’s «indebted»

All NATO member states should pay their fair share of military expenses, has stated U.S. President Donald Trump in a meeting of NATO member states in Brussels.

Sunday expected to be summer-like hot in Latvia

This Sunday is expected to be summer-like hot, whereas the week after will be cold and rainy, as reported by Environment, Geology and Meteorology Centre.

Pensioner guide: old people are isolated from society in Latvia

«In my experience with social care, I was surprised by the dominating belief that the only thing old people need is elementary care – some food, a wash and a walk outside. Psychology of old people is something completely alien to people in Latvia,» says initiator of Pensioners Guide in Latvia Nelli Skadina.

SEB: reimbursements paid to nearly 340 loan clients over the past five years

In five years since the signing of the first loan payment insurance contract, reimbursements have been paid to nearly 240 SEB Bank clients who took loans and experienced unexpected difficulties after.

Number of tourists to Riga up 7% in 2017

In the first three months of 2017, a total of 263.5 thousand people were serviced in Riga’s hotels and tourist accommodations. 221.3 thousand of those tourists were foreign guests. Compared with the same period of last year, the number of tourists has grown 7%.

Estonian capital’s Deputy Mayor arrested over waste management dealings

The Deputy Mayor of Tallinn, Arvo Sarapuu, accused of deliberately violating procedural restrictions an especially large scale as part of a criminal case, has been arrested by the Estonian Internal Security Service.

Saeima ratifies convention on restriction for the use of mercury

On Thursday, 25 May, Latvia’s Saeima ratified Minamata Convention on Mercury. The objective of the convention is protecting people and the environment against anthropogenic emissions and leaks of mercury.

Europe experienced foreign investment records last year

Last year, Europe attracted a record large volume of foreign investments with 5,845 new direct investment projects, which is 15% more than the year before, according to results of EY European Attractiveness Survey.

Electric car charging network expands in Latvia to promote «greener thinking»

The once long-away dream of having cars that run on alternative fuel is now a reality – a special infrastructure network keeps expanding in Latvia to make electric cars more popular, says Motors Latvia BMW Group manager Ivars Norvelis.

Estonian Minister steps down after questioning NATO membership

Estonian Minister of Public Affairs Mihhail Korb has stated he resigns from office after saying he is not in favour of NATO membership.

Construction of a fish freezer commences at Ventspils Freeport

Construction work has commenced in Ventspils industrial territory on Talsu Street 200. Latvian National Fisheries Producers' Organisation plans to build a fish freezer facility there, as reported by Ventspils Freeport.

EC: there is a risk tax reform will increase inequality

There is a risk that Latvian government’s proposed tax reform will increase income inequality in the country instead of lowering it, said head of European Commission’s office in Latvia Inna Steinbuka.

Electronic monitoring of convicts will help have nearly EUR 500,000 for Latvia

Latvian State Probation Service believes electronic monitoring of convicts proved itself. This system has helped save nearly EUR 500,000 for the state budget since 2015.