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Monday 25.06.2018 | Name days: Maiga, Milija

Opinion: poverty reduction to play a major role for the 2015 budget

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThis Thursday, December 11th, Saeima Budget-Finance Committee conceptually supported and decided to submit the 2015 State Budget Project to the Saeima for the first reading.

Deputies also conceptually supported the draft On the Contents of the Medium-term budget of 2015 and 2017, as well as 17 drafts related to the next year’s budget.

‘This budget is the necessary step forward for the development of national economy. It can be described as a national security and social responsibility budget. It will have a large role in the reduction of social and territorial inequality and poverty,’ – says the head of the Budget-Finance Committee Kārlis Šadurskis.

Revenue of the next year’s state consolidated budget is planned at EUR 7.25 billion and budget expenses are planned at EUR 7.47 billion. Budget deficit is planned to be 1% of GDP. Compared to last year, this year’s budget is expected to have a EUR 238 million increase in expenses. Revenue is expected to grow by EUR 208 million.

Social and national security are intended as the main priorities, including measures to reduce income inequality and improvement of competitiveness of the country’s business environment and security.

As part of the 2015 state budget project, it is planned to retain the current tax policy and not raise taxes. Revenue is planned to be secured primarily from shadow economy combating measures and better tax administration.

In order to reduce income inequality among Latvian residents, it is planned to increase minimum wages from EUR 320 to EUR 360 next year. The state budget of 2015 will have to provide EUR 7.9 million for this.

In accordance with the previously voiced decision, PIT will be reduced from 24% to 23% next year.

It is also planned that dependants under the age of 19 who study in general, vocational, higher or special education will be eligible to receive state benefits.

Changes are planned for the area of state benefits, because it is planned to cancel all limits that were set for illness, unemployment, maternity, paternity and parent benefits in 2009.

State family benefits are planned to be differentiated based on the number of children in a family: the amount is set at EUR 11.38 for the first child, EUR 22.76 for the second and EUR 34.14 for the third and any that come next.

Additional funding is planned in order to provide support to a wider range of children down with celiac disease and provide rehabilitation to victims of domestic violence. Financial support for participants and victims of Chernobyl APP is also planned to be increased.

In order to improve the situation in social security of micro-tax payers, the government plans to change the division of taxes for specific tax budgets, diverting the majority to social expenses. In accordance with previously made decision, the micro-tax rate for 2015 has been set at 11%. That of 2016 will be 13% and that of 2017 will be 15%.

In order to increase tax revenue, the government plans multiple shadow economy-combating measures – improvement of information exchange among financial institutions, strengthening of capacity of tax administration, introduction of personal responsibility for management board members for delayed tax payments, prohibition to perform cash deal for tax debtors, introduction of informative declarations for leasing and loan service providers and separation of economic activities from activities aimed at acquiring profit.

It is planned to allocate additional financial assistance to a number of measures, including support of Latvian diaspora and Latvian summer camps, as well as increase of bursaries of students studying in vocational education facilities and others.

Next year, it is planned to allocate additional funding for state supervision over construction sector, strengthening of capacity of Latvian Security Police, as well as improvement of communication with police authorities in Ireland, UK and Russia and participation of civilian experts in international operations.

In regard to healthcare, it is planned to increase availability of basic medical services in order to reduce waiting time, improve availability of compensated medical resources and materials, as well as develop and maintain e-health system in the country.


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