bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Tuesday 30.05.2017 | Name days: Lolita, Vitolds
LatviaLatvia

Economic Diary of Latvia. Latvia has the best taxation system in the world

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn the context of approval of the next year’s budget, it seems Latvia’s taxation system has not been criticized only by the laziest people. As it turns out – Latvia has the third most competitive taxation system among OECD countries. Such is the conclusion made in this week’s published International Tax Competitiveness Index.

Meanwhile, the budget for 2017 was approved by the government this week in spite of sharp criticism voiced by experts and the population. According to Prime Minister Maris Kucinskis, the next year’s budget provides additional financing to priority sectors – education, healthcare, interior and exterior security.

On the day of the budget’s approval, there was a meeting of the National Council for Trilateral Cooperation. During this meeting, social partners congratulated the Cabinet of Ministers for improving communications, but still criticized certain parts of the budget. For example, Chairman of Latvian Chamber for Commerce and Industry Janis Endzins noted that a number of important matters were resolved during the composition of the state budget for 2017. Nevertheless, he added that the remaining problems may become more problematic in the future. He named the solidarity tax, supervision of small businesses and labour monitoring as such problems.

Concerns about Latvia’s tax policy and its impact on businesses environment were also voiced by the head of Latvian Association of Commercial Banks Martins Bicevskis.

Shortly before the budget plan’s approval, Director of Latvian Employers’ Confederation Liga Mengelsone voiced her skepticism about it. According to her, the budget plan is too carefully put together. In addition, she said it is not aimed at the development of the country’s national economy. She also said that nothing was mentioned about any big structural changes in tax policy in 2017. Insignificant changes like automobile tax and natural resource tax could lead to an avalanche effect and create complications for businesses, believes the confederation’s director.

It’s not the place that giver colour the country, it’s the other way around

In spite of business organizations continuing to criticize the country’s tax policy and budgets, it turns out that Latvia actually has the third most competitive taxation system among countries of the Organisation for Economic Co-operation and Development. Latvia is behind only Estonia and New Zealand in terms of competitiveness of its taxation system, according to information from the latest International Tax Competitiveness Index.

Latvia is 2nd after Estonia in terms of tax competitiveness in businesses and 25th among OECD member states in consumer taxes. Latvia is on the 6th place when it comes to the competitiveness of property taxes, 7th in terms of personal income taxes and 2nd in terms of international taxes.

OECD notes that Latvia, which is a recently joined member, has a relatively small corporate tax (15%), fast tax return process and low personal income tax.

It is worth mentioning that France is on the last place in the tax competitiveness index.

The International Tax Competitiveness Index shows how well a country’s taxation system contributes to stable economic growth and investments. The index views more than 40 tax policy indexes in five categories: corporate tax, personal tax, consumer tax, property tax and taxation of profits abroad.

But even here business organizations decided to voice their opinions. Latvian Chamber for Commerce and Industry announced shortly after the publication of the index that the state of Latvia’s taxation system is not as good as it may seem. Latvia’s current problems are caused by large labour taxes – Estonia and Lithuania both have smaller taxes in this field. With that, it can be concluded that Latvia is the least competitive in this field, LCCI notes.

Apartment matter

Nevertheless, according to data published by Eurostat this week about real estate costs in EU member states, Latvia’s economic situation is rather good. Real estate prices in Latvia have grown 10.3% over the course of the year (Hungary has the same result). Real estate costs have grown 9% in Austria, 8.8% in the UK and 8.7% in Sweden.

Significant growth of mortgage loan services proves that Latvia’s real estate market is far from stagnant. In the first half-year, Latvian banks provided mortgage loans worth EYR 217.1 million, which is 71% more in comparison with the analogous period of last year, as previously reported by Latvia’s Association of Commercial Banks.

According to the president of the association Martins Bicevskis, there are multiple reasons for that. The main one is that the state family support programme. Loan services are also stimulated by the development of economy, which contributes to income growth and people’s desire to improve their living conditions.

But people always have the desire to improve their living conditions. However, we all know that people cannot always afford that.

Ref: 017.109.109.6792


Leave a reply

Aseradens: businessmen are important partners for the country’s development

This week, Latvian Economy Minister Arvils Aseradens will invite businesses to contribute to development of innovations, adding that the country’s healthy development requires businessmen as invaluable partners, because development of products, services or innovations also contributes to the development of separate industries, as BNN was informed by Economy Ministry.

Murniece emphasizes Lithuania’s role in the fight against Russia’s information war

Latvia and Lithuania have to continue active cooperation in security and defence, as well as transport and energy, says Latvian Saeima speaker Inara Murniece during her meeting with Lithuanian Seimas Chairman Viktoras Pranckietis.

Need for additional income equally high in all three Baltic States

More than 36% of Latvian residents gained additional income in the past year, according to data of a study performed by Swedbank’s Institute of Finances.

Accommodation and catering service industry has become a risk sector in Latvia

Non-registered employment and accidents-wise, catering and accommodation service industry is one of Latvia’s risk sectors, as concluded by State Labour Inspectorate.

Construction costs in Latvia up 0.9% in April

Compared to March, the level of construction costs in Latvia increased by 0.9 % in April 2017. Labour remuneration of workers grew by 2.9 %, prices of building materials increased by 0.5 %, whereas maintenance and operational costs of machinery and equipment rose by 0.4 %.

Estonian wage growth slows down

The average monthly gross wage in Estonia, in the first three months of 2017, compared to the respective period last year, increased by 5.7%, Estonian statisticians have estimated and concluded that the country’s wage increase has continued to decelerate for year in a row.

Allied troops continue arriving in Latvia for military exercises

Saber Strike international military exercises in Europe will be taking place throughout 3 – 15 June. Allied troops and military vehicles continue arriving in Latvia. Because of that, there may be temporary traffic congestions on roads, as reported by Defence Ministry.

De Facto: millionaire Krumins’ family donates to UGF; four more houses to be built in Jurmala

Latvian businessman Julijs Krumins’ daughter donated EUR 19,000 to the Union of Greens and Farmers in May, as reported by LTV programme De Facto. Krumins has confirmed this, adding that «four more houses are to be built in Jurmala».

State law enforcement institutions join forces to combat crime

Latvia’s state law enforcement institutions join forces to combat crime. Work groups first meeting already held, as reported by State Police representatives.

Political fights for tax reforms planned to be concluded in Mid-June

Latvian government plans to view legislative drafts associated with the intended tax reform in the middle of June. Finance Minister Dana Reizniece-Ozola says the ministry is working hard to prepare legislative drafts. The objective is viewing legislative drafts in the government on 13 June, said the minister.

More rain expected in Latvia this week; air temperature to decline also

With the beginning of next week, weather in Latvia will be dictated by the south-east part of a cyclone. Central regions will likely experience short-term rain and even thunderstorms, as reported by the Environment, Geology and Meteorology Centre.

Germany: EU cannot fully depend on allies

The European Union cannot fully depend on the U.S. and UK anymore, the long-time German Chancellor, Angela Merkel, has evaluated in election atmosphere.

Week in Lithuania. PM: Coalition isn't the best

Lithuanian Prime Minister Saulius Skvernelis, whose government has been in office for half a year, says that the Lithuanian Farmers and Greens Union and the Lithuanian Social Democratic Party differ in their philosophies and approaches to many issues.

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.

Newest comments