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Friday 20.01.2017 | Name days: Aļģirds, Orests, Oļģerts, Alģis
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Politicians have different views on adoption of progressive tax in Latvia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvian politicians have different views and proposals in regard to the possibility of adopting progressive tax in Latvia. Representatives of different factions and experts discussed this matter in the Saeima during the «What kind of progressive tax does Latvia need?» conference this Friday, 5 June.

«Progressive tax system is not just an income tax rate, it can be a progressive rate for land owners, benefits on everyday goods and additional tax on luxurious goods, a tax rate that is applied to dividends or speculative transactions, corporate income tax or tax-free allowance currently offered by Finance Ministry,» –said Romans Naudins, head of the National Economy Committee.

Finance Ministry’s parliamentary secretary Arvils Aseradens mentioned during the conference that the ministry offers the introduction of a differentiated tax-free minimum. The ministry offers having gradually introduced before 2020. This solution would be a step forward toward tax progressiveness in Latvia. In regard to the possibility of adopting a progressive PIT rate, Aseradens pointed to multiple risks. If the increase is significant, there will be an increase in the desire to hide income, which will in turn contribute to shadow economy. Adoption of progressive tax would also require the introduction of a compulsory annual income declaration plan. With that, Finance Ministry believes a differentiated tax-free allowance is a better solution.

Opposition deputy Igor Pimenov from Harmony expressed the opposite view. He believes there should be three separate PIT rates: 15% for annual income under EUR 14,400, 25% on annual income from EUR 14,400 to EUR 24,000 and 30% on annual income above 30%.

As it is known the Saeima held a special conference on Friday, 5 June, to discuss the matter of adopting progressive tax in Latvia. This conference was organized by the Saeima National Economy Committee.

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