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Verzemnieks: non-taxable minimum for pensions should be increased to EUR 500

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe government has to realize a tax reform in which non-taxable minimum is increased to at least EUR 500, says author of the Tax-free Pension initiative Arnis Verzemnieks.

The current tax reform provides for increasing non-taxable minimum for pensioners to EUR 250 in 2018, EUR 270 in 2019 and EUR 300 to 2020. The current non-taxable minimum is EUR 235 a month, as reported by the initiative’s author.

Verzemnieks explains about data: «Following Finance Ministry’s public announcements, there should not be doubts that it is possible to realize a reform in which non-taxable minimum is increased to EUR 500, because we have previously heard it from Finance Minister Dana Reizniece-Ozola, who said that by 2020 the state budget will have collected an additional amount of EUR 1.5 billion in taxes from the grey economy. Considering all that, I would propose tax policy makers to perform a gradual increase of the non-taxable minimum to EUR 500.»

The author reminds of the initiative – more than 10,000 signatures from residents were collected in 2016 in favour of cancelling PIT for first level state funded pensions. The initiative received support from Saeima’s Social and Employment Matters Committee. Unfortunately, even then it was clear the government would not realize the initiative in full amount. It was promised instead to raise non-taxable minimum for pensions to the point when only large pension recipients have to pay taxes from their pension.

«Now we see the results of those promises – it is planned to raise non-taxable minimum only to EUR 300 by 2020. This does not even reach the minimum wage amount – something the Latvian Pensioners Federation has been requesting for years,» says the author.

Welfare Minister Janis Reirs says that finance ministry’s offered reform in social field will introduce only slight changes, and most pensioners will not feel any changes from this reform.

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