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Friday 20.07.2018 | Name days: Ramona, Ritma
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BNN summary of the week: opposition in Ventspils, tax reform’s progress and growing state debt

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUBNN offers a summary of this week’s topical news in a variety of categories: Business; Decline; Future; and Growth.

BUSINESS: Kucinskis promises to find decisive solution to tax reform next week

None of the coalition partners have any desire to overthrow the government. A solution to the tax reform and healthcare funding problem will be found, said Prime Minister Maris Kucinskis in an interview to 900 seconds programme of LNT.

«Yesterday I gathered all coalition representatives. The good news is that no one has any plans to topple the government and somehow stop the tax reform,» Kucinskis said.

He says he discussed with coalition partners different sources for financing healthcare and tax reform. All coalition partners agreed that it is necessary to search for solutions.

«We agreed to reach a final conclusion next week – 14 June. We have no more time for discussions – doctors and patients are waiting,» said the prime minister.

Full article here: https://bnn-news.com/kucinskis-promises-to-find-decisive-solution-to-tax-reform-next-week-166579

DECLINE: Kristovskis says work conditions at Ventspils City Council will be humiliating

«Work conditions for the opposition at Ventspils City Council will be humiliating. Still, our commitment and political experience is sufficient to deal with it,» said leader of a joint list of candidates from Unity, National Alliance and Latvian Association of Regions Girts Valdis Kristovskis in an interview to Latvijas Radio.

Commenting on the choice made by residents of Ventspils, Kristovskis said they have demonstrated their conservative position and offering trust. At the same time, voters have demonstrated that they do not value democracy, said the politician.

He admits the opposition will have to work in conditions created by the ruling power – Aivars Lembergs’ For Latvia and Ventspils. Because of that, Kristovskis says he cannot promise more than ‘following’ the completion of the work on the city council’s agenda. «The opposition cannot dictate the agenda, it can only try to achieve goals in conditions created by the ruling power,» the politician said.

Full article here: https://bnn-news.com/kristovskis-work-conditions-at-ventspils-city-council-will-be-humiliating-166524

GROWTH: Ruling coalition in Latvia may decide to put off PIT reduction

The ruling coalition plans to discuss different new proposals for compensating mechanisms in the realization of the tax reform – higher progressiveness of PIT, the option to postpone PIT reduction by six months and others.

The coalition also intends to reach an agreement next week about matters associated with tax reform and healthcare funding. Politicians have been offered multiple variants for changes. No agreement has been reached over them so far, however.

If additional compensating mechanisms are needed, the decision may be made to postpone the reduction of PIT to 20% for six months – 1 July instead of 1 January. Politicians may also discuss a more progressive PIT rate than initially planned. The current tax reform provides for two PIT rates – 20% for income under EUR 45,000 a year (EUR 3,750 a month) and income above EUR 45,000 a year.

Full article here: https://bnn-news.com/ruling-coalition-in-latvia-may-decide-to-put-off-pit-reduction-166600

FUTURE: Tax level in Latvia insufficient; state debt may increase

Fiscal Discipline Council has concluded that the current tax revenue level in Latvia is insufficient for the state needs and there are risks the state debt may increase in a long-term perspective.

A discussion was performed in cooperation with European Commission’s representation in Latvia about fiscal longevity and the role of the public sector in improving economic growth and social welfare.

Council Chairman Janis Platais said during the discussion on 6 June: «The current tax revenue level limits the country’s ability to provide high-quality public services and adequate social protection. As the quality of life increases, it is expected that there will be higher requirements for public services.»

He continues: «Clarity is needed for the range of services and social protection measures provided by the public sector in order to develop an appropriate income policy. Financing more expenses at the cost of the state debt is unacceptable.»

In the first part of talks, European Commission’s Economic and Financial Affairs General director Manfred Bergmann provided his opinion. Information was also provided by representatives of Latvian Chamber for Commerce and Industry, Latvian Free Trade Unions Association and Citadele Bank.

Platais concluded that fiscal longevity details a country’s ability to fulfil its financial commitments. Working on the fiscal longevity report, it is important to evaluate the influence the current expenses policy could have on the state debt, considering the ageing of the population and expenditures associated with that.

Full article here: https://bnn-news.com/tax-level-in-latvia-insufficient-state-debt-may-increase-166567

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Estonians buy alcohol in Latvia; country loses EUR 20 million in six months

Latvian stores located close to the Latvian-Estonian border have sold 1.6 million litres of strong alcoholic drinks in the first half year of 2019. This means Estonia has lost more than EUR 20 million in taxes, according to data from Association of Estonian Alcohol Producers and Importers.

Lithuania’s Election watchdog slams ruling LFGU over popular TV series

Political messages can be channeled in various ways and the ruling now Lithuanian party, LFGU has chosen a very delicate way of the communications – through a TV series featuring the beauty and the ambiance of Naisiai, a picturesque settlement in Siauliai district.

Association: around 3,3000 people know of their HIV infection but receive no treatment

HIV remains a serious problem in Latvia – around 3,300 people are aware of their status but receive no treatment and continue spreading the infection. Because of that, it is necessary to act quickly for Latvia to lose its status as HIV kingdom and limit the spread of the infection, says Baltic HIV Association, informing decision-makers and responsible officials in institutions and hospitals about the HIV/AIDS situation.

Driver shortage may force reduction of international road haulage volumes

Latvia’s road haulage companies have started experiencing shortage of drivers. On top of that, if employment conditions for residents of non-EU member states do not change, it may be necessary to reduce the volume of road haulage volumes, says Latvijas auto president Valdis Trēziņš.

Lattelecom’s turnover up 9% in first half-year of 2018

Lattelecom Group’s turnover reached EUR 98.7 million in the first half-year of 2018, growing by 9% in comparison with the same period of 2017, according to unaudited financial results.

1,140 fewer births registered in Latvia in 2017

Since 2016 the number of births in Latvia is declining again. Compared to 2016, a total of 1,140 births fewer were registered in 2017. Also, the provisional number of births registered over the first six months of 2018 (9,664 children) is by 664 children smaller than that registered over the respective period of 2017.

Citadele Bank decides to reform Lithuanian subsidiary as a branch office

Citadele Bank has decided to reform its Lithuanian subsidiary as a branch office, as confirmed in the statement the bank submitted to Nasdaq Riga.

Russian pension age hike discussed amid protest outside Duma

As the Russian paliament votes on the proposal to gradually increase he pension age to 65 for men and 63 for women, some 200 people were seen protesting against the reform in Moscow.

Corruption watchdog chief says bureau has done no illegal actions

After going through Corruption Prevention and Combating Bureau’s past investigative activities, the bureau’s chief – Jēkabs Straume – found it confusing that officers often took no appropriate actions after acquiring evidence or receiving indications regarding necessary steps.

Illegal border crossings to Estonia on rise after Russia World Cup

Football fans with temporary residency permits of the Russia World Cup, or fan Ids, are trying to illegally cross the Russian border with Estonia, a member of the European Union.

Estonian 13-year-old lethally overdoses fentanyl

Estonian prosecutors have accused a 15-year old of negligent homicide after a girl, 13, passed away from fentanyl overdose.

Wild party competition and political chaos – what goes on during pre-election period?

If we compare who fought under 5% barrier some 8-12 years ago, we will see Daugava’s diggers, head nurse parties and eurosceptics parties whose ability to create some form of a working party programme was very weak. Now political parties’ competitiveness is so high that up to eight parties may successfully overcome the 5% barrier and this points to healthy competition. At the same time, in all this competitive mess it is impossible to understand where parties get financing and access to media resources, politologist and Providus think tank head researcher Iveta Kažoka commented on the pre-election period in an interview to BNN.

Google fined with EUR 4 billion for competition abuse with Android

Google has been fined by the European Commission with a fine of 4.34 billion euros illegal abuse of its dominant market position and the executive of the European Union is set to move on with investigations into other possible practices of unfair competition by the U.S. company.

Turkey removes post-coup attempt state of emergency

The government of Turkey has decided to end the nationwide state of emergency that was imposed in 2016 after a failed coup attempt, state media have reported.

House arrest of Russian theatre director Serebrennikov extended

A court in Russia prolonged the house arrest of Kirill Serebrennikov, a leading Russian theatre and cinema director, until August 22 as he waits for a criminal trial charged with of embezzlement of state funds.

NCP picks Jurašs, Strīķe, Bordāns, Feldmanis and Šuplinska as its headliners

Latvia’s New Conservative Party has picked Juris Jurašs, Juta Strīķe, Jānis Bordāns, Krišjānis Feldmanis and Ilga Šuplinska as its headliner candidates for Saeima elections.

Bank: residents spend an average of 50 to 100 euros on health every quarter

84% of residents aged 18 to 74 have used medical services in the past three months. Only 5% of all costs were covered by health insurance, according to a survey by Norvik Banka.

Countries sign third Rail Baltica co-financing agreement

Connecting Europe Facility co-financing agreement for the construction of Rail Baltica railway infrastructure was signed by participating member states on 13 July. The value of the agreement is EUR 130 million. CEF’s contribution will reach EUR 110 million, which is equal to 85% of all applicable costs, as confirmed by RB Rail communication consultant Ligita Brodiņa.

Saeima plans to increase compensations for child victims

Saeima’s Legal Affairs Committee supported for the third reading amendments that provide for increasing state compensations to child victims.

Sweden asks for help to fight wildfires behind Arctic Circle

Sweden has called for help of European Union neighbours to put out wildfires, some raging in territories behind the arctic circle.

Latvijas Krajbanka administrator recovered EUR 1,038 million in June

The administrator of the liquidated Latvijas Krajbanka recovered EUR 1,038 million in June, which is 6.9 times more than a month prior, according to the official outlook published in Latvian Herald.

Estonians warned of heat wave, high UV radiation

Weather forecasters in Estonia have warned the population of hot weather conditions, because temperatures are forecast to reach 30-31 degrees Celsius this week.

Minister says police have leads in Bunkus murder case

Police have found new leads in the murder case of former insolvency administrator Mārtiņš Bunkus, said Interior Affairs Minister Rihards Kozlovskis in an interview to 900 seconds programme of LNT.

Average EU market prices for dairy products grew in May

Compared to April, dairy product prices in Latvia did not increase in May. In the EU, however, average market prices continued growing in May, according to information compiled by Agriculture Ministry’s Market and Direct Support Department.

ECHR: Russia violated human rights in Pussy Riot and Politkovskaya cases

The European Court of Human Rights (ECHR) has found Russia guilty of human rights violations in its handling of two high-profile cases – its arrest and conviction of Pussy Riot protest group in 2012 and the investigation into journalist Anna Politkovskaya's murder.