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Friday 03.04.2020 | Name days: Daira, Dairis
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Consolidation measures of 27 million lats approved

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

On Monday, February 7, the coalition parties’ Cooperation Council agreed on this year’s state budget consolidation measures at the extent of 27 million lats; however, negotiations will continue on the rest of the required amount.

It is scheduled the revenue increase will be ensured by the implementation of effective shadow economy combat; thus, obtaining additional 12.8 million lats. Special emphasis will be put on the reduction of illegal excisable goods turnover relating to the fuel and tobacco products, as well as emphasizing the State Revenue Service (SRS) cooperation with sector association’s companies.

The consolidation proposal drafted by the Finance Ministry provides reducing the number of employees at the state direct administration institutions (ministries) by 10%; thus, ensuring two million lats savings in the state budget, as well as subjecting the following to a 1% job cuts – the State Police, State Border Guards, State Fire and Rescue Service, the Prison Place Department, the State Revenue Service and at the Ministry of Foreign Affairs.

Thus, the 10% reduction would apply to 9600 direct state administration employees, while 21 000 employees working at the state budget institutions will not be subject to it.

The Finance Ministry proposes the revocation of the reduced value added tax (VAT) for natural gas from 12% to 22%, which was foreseen in 2010, but was not implemented. By implementing these measures, it is planned to additionally gain 1.6 million lats. Currently, the reduced rate is applied only to households, but it does not affect the heat energy producers.

Considering the unreasonably fast increase of non-banking sector consumer lending services, as well as the fact that this sector was not properly monitored, it is proposed to introduce a duty for receiving a special licence for such undertakings.

To receive the initial license for such businesses, a duty will have to be paid to the State Treasury at the extent of 50 000 lats. While to further re-registrate such a company, an annual charge of 10 000 lats will be collected. It is planned that by implementing such companies licensing, the state budget will get 8.3 million lats in addition.

It is also proposed to revise the excise duty for fuel and diesel in order to adjust it to the Baltic States’ level.

It is also proposed to increase the gambling tax, and currently specific calculations are being carried out.

As reported, after assessing the state budget draft prepared by the Latvian government, the international lenders told Latvia has to carry out additional consolidation measures of 50 million lats.


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  1. Kim says:

    So they agrred at least on something…maybe the most shocking measures will follow.

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