59 members of the parliament voted in favour of the next year’s budget plan, 36 voted against, as reported by Saeima press-service.
Next year, it is planned to continue to resolve topical matters in healthcare, perform reforms in education, realize measures to better combat grey economy, conclude pay reform in law enforcement institutions and enhance corruption-combating measures. This was previously confirmed to the Saeima Budget-Finance Committee by Finance Minister Dana Reizniece-Ozola.
Funding increase for healthcare is planned at nearly EUR 64 million. This is related to the realization of the healthcare reform aimed at improving availability of oncology, diagnostics, rehabilitation and physical medical services, as well as reducing wait time for patients. It is planned that specialists will be able to perform 400,000 more patient visits using state budget funding.
Compared with 2016, funding for state defence will be EUR 98 million larger. This is because of the need to increase state defence capabilities. Defence funding is set to reach 1.7% of GDP next year and 2% in 2018.
Next year, the government will introduce a new pay system for police officers and prison officials to increase motivation and quality of work. Additional funding will also be allocated in order to strengthen eastern border control, Security Police capacity and ensure function of the Constitution Protection Bureau.
A significant funding increase is planned for education. This funding will be primarily used to secure the realization of the teachers’ pay reform.
Additional EUR 19 million will be allocated to resolve demographic problems. Benefits to families for the fourth and next children will be increased to EUR 50.07. More support is also planned to be provided to children who lost one or both parents.
Scholarships up to EUR 280 paid to students by businessmen or NGOs will no longer be applied with PIT starting next year. The tax will also no longer be applied to scholarships paid by healthcare institutions.
Next year, minimum wage will be EUR 380 (EUR 370 at the moment).
The state budget will also continue supporting grey economy combating measures. Enterprise Register’s risk management system will be improved to prevent registration of fictive businessmen. Introduction of advance payment system for social tax in taxis will help reduce illegal business activities. Reverse payment practice for precious metals will help reduce VAT fraud. Tax fraud is also planned to be prevented using customs formalities and tax payment control for transports imported from third countries.
It is planned to increase state budget revenue from gradual increase of excise tax rates for cigarettes and other tobacco products. In addition, tax rates will be increased for several types of natural resources.
The government has also reviewed certain tax payment benefits. Fuel excise tax exemption for territories engaged in corn cultivation for biofuel will be lifted for all parties except households and public transports. Road fee exemptions will also be lifted next year.
Changes will also affect small businesses. The current micro enterprise tax regime will remain in power for two more years. A new tax regime will be developed for companies with small turnover.
The Saeima also supported a number of proposals on allocation of funding for certain measures. Funding will be allocated for repair and restoration of churches in Latvia.
In addition, members of the parliament supported the allocation of funding for the procurement of learning materials, infrastructure improvements and repairs in education institutions. Funding of EUR 300,000 will be allocated for the construction of a pre-school education institution in Ikskile.
The Saeima has also decided to allocate funding for the construction and renovation of different sports structures, including J. Dalina stadium’s reconstruction and creation of an athletics field house in Valmiera (worth EUR 1.1 million), continuation of construction of an Olympics centre in Rezekne (EUR 800,000) and construction of a multi-functional sports hall in Jekabpils (EUR 600,000).
Funding will also be allocated to the development of youth sports: EUR 90,000 will be provided to Latvia’s Ice Hockey Federation; EUR 4,500 will be provided to Equestrian Federation.
Grants will be provided to social organizations representing the politically repressed, the Museum of Latvia’s Occupation, Children of Siberia project, Z. Lipke’s memorial, O.Vaciesa Museum, Barricade Museum, restoration of Museum of Liepaja, as well as reconstruction of Salaspils Memorial and establishment of Z.Annas Meierovica monument in Tukums.
The state budget plan will come into force on 1 January 2017.