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Wednesday 18.07.2018 | Name days: Rozālija, Roze
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Expert: for tax reform to yield results, it should have been given three years to develop

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUFor it to yield tangible results, the tax reform should have been given at least three years to develop, says financial and legal affairs consultant, Latvian Tax Consultant Association’s chairman Ainis Dābols.

He is confident that any tax reform’s introduction period should be longer than what Latvia has now.

«I was present at the meeting with Finance Minister Dana Reizniece-Ozola. She said there is no more room for delays – elections are around the corner. On top of that, she said there is a number of European Commission requirements and other reasons why it should be done this year. Perhaps she is right. Nevertheless, but if the effect from the reform would have been better if it had been in development longer,» said Dābols.

According to him, it would have been better if the reform had been in development for at least three years. «It is easy for politicians to say – let’s introduce some new rules and then see how things go. I would rather the State Revenue Service not tell me out of the blue in 2020 that I owe something from 2018. Who would pay the tax debt for me – the prime minister?» said the tax consultant.

He believes it would be best to have a transition period so that businesses would not be applied with full-sized sanctions for problems with SRS. Unfortunately, because there is no transition period, businesses and private persons can expect some unpleasant surprises and even penalties.

«The new system could bring about situations under which it may turn out that you as a private person did not pay PIT in full. Under the current situation you can submit a declaration with receipts for justified expenses and receive back part of your paid taxes. Under the new system, however, it is quite possible that you will be the one to pay the state budget,» said Dābols.

He continues: «In 2019, when you submit your declaration for 2018, you might accidentally find out that you owe the country an amount that is rather substantial for an average working person. If you are the kind of person who carefully plans their family’s budget, it will come as a very unpleasant surprise.»

«This is why I am in favour for the reform to work at least several years before we can model situations and decide on different new laws to accommodate them,» he adds.

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