bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 19.08.2018 | Name days: Melānija, Imanta
LatviaLatvia

Economist: the most important reform has to happen in people’s heads

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«Of all the clever things taught to us in school about psychology, one thing that has stuck with me over the years is the idea of internal/external control point. There are people who believe they make their own fate. There are also people who believe our fate depends on external powers. I suspect people in Latvia explain successes and failures with external factors much more than people in Switzerland or any other country that has enjoyed its freedom longer than Latvia,» comments Luminor Bank’s economist Pēteris Strautiņš.

According to the economist, the disappearance of this matter from the political agenda is considered the largest success of the tax reform. «The previous system was not bad, but the new one may be slightly better. Still, it will not introduce any radical changes to our lives and the country’s economy. Focus on actually important matters could bring about larger changes, however.»

Strautiņš adds: «Society’s attention is an under-appreciated resource in Latvia. There could have been a catastrophe with the mandatory procurement component had there been some other topic to catch people’s eyes. The biggest damages were caused by decisions made at the beginning of 2009. After that, there was more or less successful fight with consequences.»

He notes that he is not confident about the tax reform, that it will bring tangible changes. «Life will become more interesting, especially for accountants. As for private persons, everyone can calculate the effect of the reform on them, using tax calculator available on the internet. It did this for myself – the result was a microscopic net wage decline. I am not worried about it. There are people who earn more. Whether or not the increase for them will be eaten away by excise tax will depend on their spending habits and driving habits.»

The economist predicts businesses will experience the largest changes. «One good system to improve production investments and increase amortization coefficient for equipment was replaced with a different good system – non application of taxes on reinvested profits. It will be like Estonia – yes!»

Strautiņš emphasizes that the most important tax reform should take place in people’s heads. «We have to stop using taxes as an excuse for developments taxes cannot possible explain. For example, if a business is no longer sustainable, this fact is often brought about by two ‘evil figures’ – the tax inspector or bank. Even if blaming something specific instead of abstract market forces does not resolve a problem, but rather lets the ‘victim’ feel better.»

The economist says discussions about less effective tax reforms in public space should be replaced with processes that help create added value. «Simply put – the future of Latvia’s economy depends on two processes: exports of services in Riga and industrial development in Latvia’s regions. Development relies on measures with a much more accurate effect.»

How are we supposed to build capitalism?

The general feeling in society, especially in certain business media and business organizations is that something is not entirely right with taxes, that they make it harder to live, that the system needs serious changes was so great, political will to perform reforms turned out strong enough. I still don’t fully understand what it was intended to accomplish, but at least I hope that some of our residents will feel better, says Strautiņš.

«I’m not saying that the system was perfect before and that it has become perfect. More changes to taxes will definitely be needed in the future. But their goals should focus on consolidating society, not purely economic development. Latvian laws provide too large opportunities for ways to legally reduce taxes in an economically illogical and unjust way,» the economist continues.

Ref: 224.109.109.4094


Leave a reply

Eurostat: Latvia had inflation rate higher than average in EU and Eurozone

In July, Latvia’s inflation rate was higher than the average in Europe and Eurozone, according to data published by Eurostat.

Presence of Latvian milk reduces, whereas presence of imported milk increases in Latvia

The proportion of milk produced in Latvia is starting to lose to imported milk, as concluded by Central Union of Latvian Dairy Farmers chairman Jānis Šolks.

Seven previously convicted candidates crossed from Saeima election lists

On Friday, 17 August, the Central Election Commission decided to cross out seven previously convicted deputy candidates. The decision regarding one more candidate has been postponed until the next meeting, as confirmed by the commission.

Aspiring prosecutors «drop out» in tests – half of contenders fail second stage of tests

Approximately half of aspiring prosecutor candidates has failed the second portion of tests for general and judicial knowledge.

Riga International Airport concludes first half-year with turnover increase of 13%

Riga International Airport concluded the first half-year of 2018 with turnover increase of 13% when compared to the same period of 2017, according to the airport’s unaudited and shortened account for the six-month period before 30 June 2018.

New tender announced for post of SRS director; first requirement – spotless reputation

Latvia’s State Chancellery has announced an open personnel selection process for the post of director of State Revenue Service. Application submission process will last until 14 September.

CEC to decide on four candidates’ possible relation to KGB

Latvia’s Central Election Commission has received results of investigations of all 13th Saeima election candidates from Interior Affairs Ministry’s Information Centre and Latvian Centre for the Documentation of the Consequences of Totalitarianism.

Concord will have to include bread distribution costs in kebab café in its pre-election expenditures

Political party Concord will have to include in its 13th Saeima pre-election campaign expenditures the money spent by one of its candidates on distributing bread to pensioners free of charge in a kebab café in Bolderāja, as reported by TV3 news.

Weekends expected to be warm and at times hot in Latvia

On Friday, 17 August, the sky will partially cloudy again in Latvia, but no major precipitation is expected. Fog may form is certain regions at night thanks to slow wind speed. Maximum air temperature is expected to be around +22° C… +26° C. Night-time air temperature will stay at +11° C… +16° C, as reported by State Environment, Geology and Meteorology Centre.

Latvia’s State Audit requests additional funding to invest in workers

State Audit has requested additional funds in next year’s budget to invest in employees, as head of the institution Elita Krūmiņa mentioned in an interview to Latvijas Radio.

Nearly half of children born in Latvia in 2017 were delivered by mothers with higher education

20,828 children were born in Latvia in 2017. Almost half of them were born to mothers having higher education. Out of the total number of newborn children mothers, 7,229 or 34.7 % had acquired upper secondary general or vocational education and 2,775 or 13.3 % had basic education or lower.

«Steel Magnolia» named Lithuania's most influential politician for fourth consecutive year

Lithuanian President Dalia Grybauskaitė, dubbed as «Steel Magnolia» by foreign press, remains the most influential politician in the country for the fourth consecutive year. In two separate polls, one by the popular ratings magazine Reitingai and the other by pollster Spinter Tyrimai, she appeared on top, being followed by Saulius Skvernelis, Prime Minister, Ramūnas Karbauskis, the leader of the ruling Lithuanian Farmers and Greens Union (LFGU), Valdas Adamkus, ex-president, and Vytautas Landsbergis, Lithuania's first post-independence leader.

Ex-director: Rundale Castle Museum should be managed with the same ideals as before

In the years to come Rundale Castle Museum should be managed with the same ideals as before, says the soon ex-director of the museum Imants Lancmanis, who intends to retire at the end of this year.

Star Rating determines the best schools in Latvia

According to the 2018 Star Rating, Riga State Gymnasium No.1 remains in the lead among Latvia’s schools. Daugavpils Russian Secondary School – Lyceum is second, and Riga State Gymnasium No.2 is third.

ABLV Bank assets worth EUR 21.052 million were recovered in July

Liquidators of ABLV Bank have recovered assets worth EUR 21.052 million in July. This includes EUR 11.602 million recovered from issued loans, EUR 7.644 million from recovered/sold securities, EUR 1,792 million from loans provided to credit institutions, and EUR 14,000 from sales of real estate and other types of property, according to the account published in Latvian Herald.

Concerns over Turkish crisis cause world stock market decline

Stock prices around the world took a massive dive on Wednesday, 15 August, as concerns over Turkish crisis’ possible influence and investors’ attempts to get rid of risky assets surfaced again.

Election commission receives word some candidates’ possible non-compliance with the law

Latvia’s Central Election Commission has received information regarding possible non-compliance of multiple deputy candidates with requirements of the Saeima Election Law, says CEC chairman Arnis Cimdars.

African swine fever found in domestic pigs in Saldus; inspectors investigate illness in Unguri

African swine fever has been found in domestic pigs in Saldus Country’s Zaņa Parish. The infection was found in four domestic pigs. It cannot be excluded that ASF may have entered SIA Druvas Unguri farm’s pig enclosure along with sawdust or cars, as reported by Food and Veterinary Service Public Relations Office manager Ilze Meistere.

Lithuania lays symbolic rail on restored Mažeiķi–Reņģe railway line

Lithuania’s Lietuvos geležinkeliai railway company’s director general Mantas Bartuška and Polish oil concern Orlen manager Daniel Obatjek laid a symbolic rail on the restored railway route connecting Orlen Lithuania owned Mažeiķi oil processing plant in Lithuania and Reņģi in Latvia this Tuesday, 14 August.

Unemployment level in Latvia down to 7.7% in Q2 2018

In Q2 2018 Latvian unemployment rate constituted 7.7 %. Compared to the previous quarter, unemployment rate fell by 0.5 percentage points, while over the year it dropped by 1.2 percentage points.

Saeima approves stricter requirements for fast loans

On Tuesday, 14 August, Saeima’s Economic Committee supported in the second reading amendments to the Consumer Rights Protection Law. The legislative draft states that total loan costs that exceed 0.07% a day from the loan amount are unacceptable and non-compliant with good practice, as reported by Saeima press-service.

Noord Natie develops a new business niche – attracts cruise ships for Ventspils

The first of the cruise ships attracted from SIA Noord Natie Ventspils Terminals will arrive at Ventspils port this week. NNVT stresses that development of cruise business as a new product will help develop tourism in the city and region, as well as provide a contribution to economic development and raise recognition of NNVT terminal and the city.

Culture Ministry announces open contest for post of director of Rundale Castle Museum

Latvia’s Culture Ministry invites contenders to apply for participation in an open contest for the post of director of Rundale Castle Museum. Contenders can submit their applications before 14 September.

Lithuania’s Central Bank to assess information about Latvian VIA SMS Group

Lithuania’s Central Bank has promised to assess information regarding Latvian VIA SMS Group working in the country. This decision is a reaction to the statement made by Seimas National Security and Defence Committee member Arvydas Anušauskas that people associated with former Parex Banka owners work in that company.

Small wineries in Latvia will be allowed to use only local products

Members of Saeima’s Economic, Agricultural, Environmental and Regional Policy Committee supported amendments to the Handling of Alcoholic Beverages Law, stating that small breweries will be allowed to use products grown only in Latvia.

Newest comments