bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 17.12.2017 | Name days: Teiksma, Hilda

Rimsevics: tax rise – gravedigger of economy

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

The Bank of Latvia President Ilmars Rimsevics

The Bank of Latvia President Ilmars Rimsevics (Ilmārs Rimšēvičs) in a press conference of September 9 emphasizes that further increasing of taxes would be a grave digger of Latvia national economy. It would deem Latvia to long-term stagnation.

Rimsevics is convinced that qualitative development of the budget will be of decisive importance for the recovery of economics. The Bank of Latvia considers that budget consolidation conducted on the basis of tax increasing should not be allowed. The only way out is cutting the still existing excessive budget spendings.

After calculations of the Bank of Latvia experts, 2011 budget consolidation must be done in amount of 400 million lats instead of publicly available information – 350 or even 200 million lats. The President of the central bank reminded that next year’s budget in volume of 6% is just the minimum the state should do, in order «not to be included in the unsuccessful states list». However, to his mind, hope for rapider growth than currently possible, on the basis of budget consolidation, should not be allowed.

«One must not risk with the future of the state according to a principle – it might not be too bad. That way we can loose the fragile stability we have achieved so far,» told Rimsevics underlining that faith in the processes taking place in Latvia is the main thing the national economy could develop. However, at the moment he has come to a conclusion that there is still no clarity about the future decisions.

Rimsevics especially pointed out that if taxes are risen, Latvia national economy will be deemed to long-term stagnation, which means that unemployment rate is to grow, shadow economy to extend; and revenue derived form tax to decrease instead of increasing. The residents and companies of Latvia will suffer the most.

The President of the Bank was also certain that successful development of the next year’s budget, when consolidation is conducted on the basis of spendings reduction, enables Latvia to repay debts in, in case of necessity, it could refinance in the international markets at favorable interest rates.

The fact that the hopes to promote the economic activities with the help of budget deficit were not fulfilled was given by Rimsevics as a reason why budget consolidation should be done. Such approach has fastened stagnation even more. He considers that obscurity regarding state finances is one of the main reasons why banking sector is slow to resume crediting. The low state credit ratings, which are affected by the high budget percent, do not make Latvia more attractive in the eyes of investors thus the economics does not benefit from that.

«The residents and entrepreneurs, seeing that the state continues to spend money that has not yet been earned, are not sure about their future and are not quick to spend their own money,» explained the President of the Bank of Latvia.

«If the government developed a qualitative 2011 budget, then no difficulties, not even in the whole world, would be able to to leave a destroying effect on the national economy,» Rimsevics was convinced.

As it has already been announced the Prime Minister Valdis Dombrovskis has stated that, in case, ministries cannot find any possibilities to reduce expenditures, budget revenue will be increased on the basis on tax rising.

«What is clear – not doing anything will not be an option,» the Prime Minister told in an interview to LNT morning news broadcast 900 sekundes.

«Government expenditures will have to be reduced in any case – in what areas and to what amounts – it will still be discussed. The less we reduce spendings, the more we have to receive from revenue derived form tax,» explained Dombrovskis.


Leave a reply

Citadele Index: businessmen are more optimistic about economic growth

After a four-year gap, optimism has been noticed in all of Latvia’s business sectors. For the third consecutive quarter Citadele Index value exceeds 50 points. Businessmen are also positive about the country’s economy and their own finances, according to the final Citadele Index study for 2017.

Bank of Latvia increases GDP growth outlook to 4.7% for 2017

Bank of Latvia has decided in increase gross domestic product growth outlook from 4.2% to 4.7% for 2017, as reported by the bank’s governor Ilmārs Rimšēvičs.

Latvian residents’ opinion of government’s work remains negative

Latvian residents voiced the biggest degree of dissatisfaction about the development of the situation in Latvia and the work performed by the government. Although the previous evaluation of government’s work had increased by four points, it has since declined by two points, according to data from Baltic International Bank’s Latvian Barometer.

Eel fishing to be restricted in Baltic Sea for three months

European Union Fisheries Council has decided to restrict eel fishing for three months in 2018 in all waters, including the Baltic Sea. Although the World Wide Fund for Nature and environmental organization in Europe view it as a notable first step, these efforts are unlikely to have a major impact on the most important problem – eel population continues declining rapidly, as noted by WWF.

LCCI: increase of electricity bills for thousands of companies in unacceptable

Latvian Chamber of Commerce and Industry (LCCI) categorically opposes increasing electricity bills for the majority of small and medium-sized companies due to mandatory procurement component’s differentiation. The organization believes that this would basically introduce a new additional tax, making them even less competitive.

Head of Latvian Association of Regions to spend Christmas thinking on remaining in the party

Dissatisfied with multiple decisions made by Latvian Association of Regions (LAR), Riga City Council member Mārtiņš Bondars will spend the holiday thinking about his place in this political party, as he mentioned in his interview to Rīta panorama or LTV.

Estonian fund permitted to purchase several Latvia energy production companies

Latvian Competition Council has permitted Estonian fund to purchase several energy production and agricultural companies.

Meat processing giant sees room for growth in ready-to-eat foods

Consumption in the meat market segment of ready-to-eat foods is growing quickly, evaluated Finnish meat processing group HKScan that is planning to invest eight million euros in its factory in Estonia.

To fight for national minority schools, Russian representatives promise to hold a referendum

Defenders of Russian schools in Latvia promise to organize a referendum for autonomy of national minority schools, said co-chairman of Latvian Russians Association Miroslavs Mitrofanovs in regards to the transition to education only in Latvian language.

Tax payment process from capital growth to change in Latvia

As part of the tax reform, changes will be added to the Personal Income Tax Law starting from 1 January 2018. One of the changes is associated with payment and declaration of income from capital growth. The tax rate and the term for submission of declarations on income from capital growth will change next year.

Tusk deems EU migrant quotas ineffective as some states oppose taking in migrants

Donald Tusk, the head of the Council of the European Union and chairman of this week's EU summit, has evaluated that mandatory EU-wide quotas are ineffective and that there is a split between east and west as regards asylum policy.

Riga City Council’s 2018 budget – poorly planned or well-developed?

As the vote for the 2018 budget of Riga City Council draws near, representatives of all opposition parties say they will not support it as long as politicians of the ruling coalition continue viewing the city’s most important financial document as good and aimed at development.

Euro area economy has grown quicker than expected, European Central Bank estimated

Growth has been at a faster pace in the eurozone prompting the European Central Bank to raise its economic growth forecasts.

Weekends in Latvia expected to be snowy

A layer of snow will form in Latvia’s central and western regions that will remain until the middle of next week, as reported by State Environment, Geology and Meteorology Centre.

Opinion: Latvia at risk of restricting healthcare to 300,000 people

Kustība Par! political party has sent a letter to Latvia’s President Raimonds Vējonis, asking him to return to the Saeima the recently approved law on healthcare funding legislative draft. According to the party, the law restricts healthcare for 300,000 people in Latvia.

Lithuania’s 2018 budget focuses on spending cuts, NATO commitment and social security

Lithuania's 2018 budget, approved this week by the Seimas, Lithuanian Parliament, makes history for being the first budget ever with fewer spending for the governmental sector, the commitment to NATO of earmarking 2 per cent of the gross domestic product to defence and bigger allotments for social security. The budget was adopted by 84 MPs, 29 voted against, with 15 abstentions.

EU member states have to strengthen measures against sexual abuse of children

Member states of the European Union have to take more serious measures and cooperate more intensely with Europol and information technology industry to better combat sexual abuse of children, as noted by members of the European Parliament.

Latvian parliament views initiative for changing VAT rate for food product

On Thursday, 14 December, Latvia’s Saeima made its decision on the collective application that proposes reducing VAT on everyday healthy food products and increasing VAT on unhealthy products.

Maxima: residents have become more conservative in their choice of products

In Q2 and Q3, a higher degree of conservatism was noticed in residents’ choice of products. The number of buyers who gladly purchase new products has declined, whereas the number of buyers who do not change anything in their purchasing habits has increased, according to results of a study performed by Maxima.

Civil processes to be sped up and simplified in Latvia

On Thursday, 14 December, Saeima supported amendments to the Civil Process Law in the final reading. Amendments propose several major changes to the process of review of civil processes to make court sessions quicker and more efficient.

State Auditor dissatisfied with parliament’s slow legislative process

Latvian State Auditor Elita Krūmiņa plans to inquire to the Saeima about the delay with the approval of the legislative draft on the expansion of authority of her institution, as she mentioned in an interview to Rīta panorama programme of LTV.

Aldaris commences exports to France, China and Netherlands

Aldaris concludes 2017 with three new export contracts, commencing exports of products to China, France and Netherlands. Until now Aldaris has exported products to eight markets, with the largest one being United Kingdom, taking up 78.71% from Aldaris export volume, as reported by the company.

Estonian budget passed with 0.25 billion-euro deficit

The Estonian Riigikogu with 55 votes against 41 has passed the country’s 2018 state budget bill planning to spend by 0.25 billion more than it is planned to earn.

AFSAL: loan requests in non-banking industry are declined in 69% of all cases

In the first six months of 2017 Alternative Financial Services Association of Latvia (AFSAL) issued a total amount of EUR 84.7 million in consumer loans. No increase is noted in this amount when compared with the same period of 2016. Increase did not exceed 0.2%, as reported by the association.

European Parliament supports changes for combating activities detailed in Panama Papers

Public registries with names of true owners of businesses, effective protection of whistle-blowers and stricter requirements for financial intermediaries are some of the proposals intended to assist with the fight against tax avoidance, as noted by members of the European Parliament.

Newest comments

When do you go shoping for Christmas gifts?

View Results

Loading ... Loading ...

Polls Archive



Category feed: Feed: