bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Wednesday 29.03.2017 | Name days: Agija, Aldonis
LatviaLatvia

LEC: Latvia risks becoming a country with low quality of life

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU2016 is best described by events whose influence on the business environment and employers will only be possible to assess after some time, according to Latvian Employers’ Confederation’s outlook on positive trends of 2016.

Maris Kucinskis’ Cabinet of Ministers began its work this year. Even before his approval in his new post, Kucinskis and his partners agreed on common priorities. LEC urged the government to ensure the country would be able to achieve positive results next year that would contribute to GDP growth and secure quality of life standards equal to 70% of the average level in the EU. The latter has no turned out so well, unfortunately. It is likely Lithuania and Estonia will do better in this regard, LEC notes.

One of the year’s most important developments was Latvia’s joining of OECD. Joining this organization provided specific benefits and improvements – it was the main driving force behind the capital associations’ management reform and served as a stimulus for state institutions to combat bribery in international business transactions.

At the same time, it should be emphasized that joining OECD will not provide the results expected for the country’s national economy if introduction of OECD recommendations is not finished in a timely fashion, LEC notes.

To express common views and objectives, cooperation and social dialogue principles, LEC, as one of the government’s social partners, signed an agreement with the Prime Minister, Latvian Association of Local Governments, Latvian Chamber of Commerce and Industry and Latvian Science Academy on 9 August on conditions necessary to ensure national economic growth. It offers optimism and pre-conditions for necessary reforms and changing unfavourable emigration tendency, as well as increasing security of residents, says LEC director general Liga Mengelsone.

«By putting off or avoiding necessary reforms, Latvia risks becoming a country with average level of quality of life below that of the average in the EU, resulting in people leaving it in favour of looking for a better life elsewhere,» – Mengelsone continues.

It is planned to reach an agreement on one of the points next year, specifically in the context of tax policy – review of solidarity tax rate, as this year’s data showed what consequences surfaced as a result of the introduction of this tax.

«Rushed and poorly considered solidarity tax’s introduction has changed the behaviour of taxpayers and has created losses for the state budget,» – Mengelsone said. She adds that data for the tax showed that even though it had provided additional funds for the state budget, the number of large wage recipients has declined. This means the long-term impact on the state budget will be negative. It does not contribute to growth. It also makes the tax system more complicated for medium and large taxpayers.

One of the objectives LEC had proposed for the new government was working on improving indexes in Doing Business rating. In autumn, LEC came to the conclusion that this goal was successfully reached, as Latvia climbed to the 14th place among 189 countries. Unfortunately, not much progress has been achieved. On top of that, not only no progress has been reached in this rating, Latvia has also dropped to 49th place in it. «Latvia’s rating is significantly lower. This is because of the level of bureaucracy in the country’s state administration, the level of development of the country’s infrastructure, quality of healthcare and education policy, as well as tax rates and regulations associated with taxes. Because of that, Latvia’s competitiveness assessment, compared with last year’s results, is five places worse,» – Mengelsone explains.

LEC mentions Saeima’s decision for amendments to the Insolvency Law as one of the positive accomplishments of 2016. New regulations are but part of many measures on the road towards sorting out insolvency process. Businessmen expect work will continue to create legal and safe business environment for investments.

In spite of certain exceptions, the year can be described with the word ‘cooperation’. Although LEC believes recent decisions in budget and tax affairs are not very good, businessmen emphasize that it has been possible to establish active, mutually beneficial dialogue with Kucinskis’ government.

It is highly important to continue the dialogue, find common ground and reach agreements on the tax policy strategy next year. Results will demonstrates whether or not interests of businessmen have been taken into account and whether or not government representatives understand tax policy is a good tool for development of the national economy.

LEC and LCCI have already prepared their proposals for the medium-term tax policy to ensure the creation of a great business environment and accomplish economic breakthrough. Some of the most important principles are stability and predictability.

In the context of a better tax policy, it is important to resolve the matter regarding employees’ social security, as keeping this matter unresolved could potentially cause very unpleasant consequences in the future and increase pressure on residents’ social protection. LEC believes it is also important to add mandatory health insurance components in the current social tax rate.

In the context of national economy development, one of the most important objectives for next year is reviewing the mandatory procurement component for electricity, considering the current MPC for large producer companies is currently too high. This does not contribute to overall competitiveness of those companies and only serves to reduce the ability of industry participants to invest and ensure wage increase.

Ref: 102.109.109.5797


Leave a reply

Martins Bondars invites Riga residents to «topple» Nils Usakovs

Leaders of political parties Latvian Association of Regions and For Latvia’s Development believe the current Mayor of Riga Nils Usakovs is a real burden for the capital city’s development. This is why they have made it their main objective to «topple» Usakovs, as noted by Latvian Association of Regions.

Unity asks for assessment of Rail Baltica project for influence on Riga’s development

Unity’s representatives in Riga City Council Olafs Pulks and Nils Josts ask for an assessment of Rail Baltica project’s influence on the city’s development.

Latvian Defence Ministry signs agreement on cooperation in cyber security matters

As part of the E-skills week, Latvian Defence Minister Raimonds Bergmanis and President of Latvian Information and Communications Technology Association Signe Balina signed an agreement on cooperation in matters of cyber security.

Elvi and Aibe store networks form joint procurement group

Last week, two local Latvian store networks Elvi and Aibe commenced work on the creation of a joint company that would perform centralized procurements, as BNN was informed by representatives.

As UK readies to launch Brexit, interest in Estonian e-residency grows

A growing number of British citizens are applying for Estonian e-residency as the UK government plans to announce that the country will start leaving the EU later this week.

Expert: municipalities are incapable of attracting new residents

One way to increase budget revenue for municipalities is attracting new residents. This is a problem in Latvian municipalities, especially in Jurmala. «The city lacks cheap and accessible housing offers. This does not contribute to the attraction of new residents,» says real estate expert Jevgenija Dmitricenko.

Estonian gas seller: Excise duty hike unconstitutional

Estonian natural gas importer and seller Eesti Gaas has addressed the country’s Chancellor of Justice insisting that the increase of excise duty passed in 2016 was not in line with the rules of the Estonian constitution.

Bulgarian parliamentary election won by Borissov’s centre-rights

In the early parliamentary election of Bulgaria, the centre-rights led by the country’s long-time Prime Minister Boiko Borissov have won.

E-skills week to address the matter of digital security

Priorities of this year’s E-skills week include digital security and digital skills for employment and entrepreneurship, as well as e-services, comments vice-president of Latvian Information and Communication Technology Association Mara Jakobsone.

Strīķe: whenever contraband was associated with parties, SP put up all kinds of barriers

«I would never join any of the political parties that are currently in power,» said former official of Corruption Prevention and Combating Bureau and mayoral candidate from the New Conservative Party Juta Strīķe.

Penalty for not complying with state language rules – up to EUR 10,000

Amendments have been prepared for Latvia’s Administrative Violations Code. These amendments provide for a major increase of fines for non-compliance with state language regulations, as reported by the National Alliance.

Navalny jailed in Russia after organising anti-corruption mass protests

Russian anti-corruption activist Alexei Navalny has been convicted for disobeying police at a mass protest in the weekend.

Imants Liegis becomes Latvia’s first ambassador to Algeria

Submitting a copy of credentials to Algeria’s Foreign and International Cooperation Minister Ramtane Lamamra, Imants Liegis became Latvia’s first ambassador to Algeria with a residence in Paris, France, as BNN was informed by Foreign Affairs Ministry’s press-service.

EC develops stricter requirements for EU competition institutions

The European Commission invites member states to provide competition institutions with resources, independence and effective authority, as BNN was informed by Competition Council.

Tallinn Airport summer schedule to contain 36 routes

Tallinn Airport has announced its summer schedule that will include direct flights to 36 destinations and take effect from mid-April to late May depending on the airline.

«Elf» movement created to oppose internet «trolls»

«While the internet is the leading platform for topical news, it is also an environment for intentional disinformation and lies,» says researcher of the Eastern European Policy Study Centre Maris Cepuritis.

Construction costs in Latvia up 0.8% in February

Compared to January, the level of construction costs in Latvia increased by 0.2 % in February 2017. Labour remuneration of workers rose by 0.8 %, prices of building materials as well as maintenance and operational costs of machinery and equipment grew by 0.1 %.

Pärnu property sold for building plywood plant

Finnish capital company Metsä Wood Eesti has bought 104,000 square metres of land with plans to construct a 50 million euro plywood factory that would employ 200 workers.

Green farmer Krauze does not agree that circus animals have earned «freedom»

«When we were fighting for our freedom, I never would have imagined that we would start closing different circuses, because they present historical and cultural values. I believe we should not restrict that on a legislative level. If any circus owner wants to do that, they can. But we should not establish such restrictions on a national level,» said Armands Krauze, member of the Union of Greens and Farmers.

Providus/Delna notice major risks in approval of KNAB chief’s retirement pension

Saeima’s decision to support amendments to the Law on Retirement Pension of the Chief of Corruption Prevention and Combating Bureau has signs of state take-over, as stated by Providus and Delna in their Saeima work monitoring report for February 2017.

Programme: new TV3 and LNT owner will likely sell channels to someone else

The next owner of TV3 and LNT television channels, American Providence Equity Partners investment company, will likely sell these channels to someone else after some time, as concluded by De Facto programme of LTV.

Opinion: multi-speed development idea in Europe is not in Latvia’s interests

The idea of having a multi-speed Europe, as described in the Rome declaration signed by EU member states, does not comply with Latvia’s interests, says president of European Movement – Latvia Andris Gobins.

European Regional Development Fund allocates 15 million euros for start-up ideas in Latvia

For the first time in Latvia, Altum development financial institution has announced a search for acceleration fund managers. These funds will allocate so-called smart money for the realization of different business ideas in their early stages of development. Businessmen will be able to receive up to EUR 250,000 to realize their ideas.

Navalny detained as series of anti-corruption protests held across Russia

The leading Russian opposition activist Alexey Navalny has been detained in Moscow as series of anti-corruption protests were held across Russia.

Hundreds of protesters arrested in Belarus after mass protests

Several hundred people in Belarus have been arrested after participating in mass protests in Minsk and other cities.