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Tuesday 24.04.2018 | Name days: Nameda, Visvaldis, Ritvaldis
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LALRG worried over losses caused by planned tax reform

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUWelfare Ministry’s proposals for increasing minimal income for groups of residents at risk of poverty should be reviewed in accordance with Finance Ministry’s planned tax reform, said chairman of Latvian Association of Local and Regional Governments Andris Jaunsleinis.

He notes that LALRG is already at risk of suffering major losses because of the planned tax reform. Because of that, there is no clarity as to where municipalities are expected to find additional funding for measures like increasing minimal income for groups at risk of poverty.

‘The worst part is that these two things are not combined on a government level. We have only one government, but sometimes it feels as though we have three – one is the education government, the second is the welfare government and the third is the finance government,’ Jaunsleinis explains.

The chairman noted that clarity about the planned tax policy and its influence would help maintain municipal budgets on the current level. Only then will it be possible to talk about positions and sources of additional income.

‘If we maintain this year’s budget in 2018 or 2019, a question will surface as to how we are supposed to finance Welfare Ministry’s intended measures. The social policy should be reviewed, considering the new tax policy, as this will change households’ income. These matters should be addressed side by side,’ he said.

As it is known, Welfare Ministry has prepared proposals to help increase the income of groups under the risk of poverty.

For the plan’s realization in 2018 and 2019, funding of EUR 75,171,033 is necessary. This includes EUR 36,709,322 from Welfare Ministry’s budget and EUR 38,461,711 from the municipal budget.

Pension indexation review for people with major work experience and family state benefits for the third child at EUR 50.07 are planned for 2018. From 2019 onward it is planned to establish income level for poor persons at EUR 188 instead of the current EUR 128.06.

The guaranteed minimal income level is planned to be equal to half of the level for poor persons – EUR 94.

Starting with 2020, it is proposed to establish a unified apartment support threshold in the country and establish a unified income level for poor persons, so that it is possible to provide residents who have similar income levels with equal opportunities to receive support.

Ref: 224.109.109.2049


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