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Saeima supports tax reform laws in final reading

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUSaeima’s Budget and Finance Committee has concluded work on tax reform laws, supporting them in the final reading. Part of the proposals on additional benefits and multiple other matters will be put off for a later date.

Members of the committee concluded assessing all legislative drafts associated with the reform. Saeima’s Social and Employment Matters Committee supported the Law on State Social Insurance on Wednesday, 26 July.

Budget committee started assessing proposals for legislative projects for the final reading this Tuesday, when proposals for possible changes were reviewed by the government. On Wednesday, the committee worked all day – with several breaks over the course of 13 hours. In total, the parliament received around 350 proposals for reform laws.

When assessing proposals, the opinion of deputies coincided with decisions of the government. Many of the supported proposals were editorial. Nevertheless, there were multiple conceptual matters in which deputies changed their previous decision about possible amendments.

Part of the proposals on additional benefits and multiple other matters is planned to be put off for a later date. Decisions are planned to be made during budget review period. Finance Minister Dana Reizniece-Ozola says this decision is only logical, because there are matters that are not associated with the reform. The budget review is the right time to review them, because then it will be possible to balance desires with opportunities, said the minister.

Reviews of tax reform are planned to commence at the next Saeima meeting this Thursday.

The most massive changes are planned for the Law on Personal Income Tax. Law amendments provide for establishing differentiated PIT rate starting from 1 January 2018. PIT rate for annual income below EUR 20,000 will be 20%, for income under EUR 55,000 will be 23% and for income above EUR 55,000 will be 31.4%.

Major amendments are intended for the Law on State Social Insurance. The legislative draft states that social fees will be increased by one percentage point. This will make the mandatory fee rate for employers will be 35.09%, of which 24.09% will be covered by the employer and 11% by the employee.

Also law amendments provide an obligation to perform mandatory fees from royalties. It is planned that royalties will be paid by the recipient at 5% to insure the recipient’s pension.

Amendments to the Micro-enterprise Tax Law provide for maintaining a simplified payment procedure and unified tax rate of 15% from turnover, as it is meant to relieve the administrative burden for start-up entrepreneurs and companies with low annual turnover.

While previously Economy Ministry proposed setting maximum turnover for micro-enterprises at EUR 50,000 instead of the current EUR 100,000, the new variant proposes setting the cap at EUR 40,000.

Ref: 224.109.109.6001


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