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Sunday 05.04.2020 | Name days: Vidaga, Aivija, Vija

Latvia’s Saeima approves budget plan for 2020 in first reading

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe Saeima has conceptually approved the 2020 state budget project, medium-term budget plan for 2020, 2021 and 2022, as well as 26 accompanying legislative drafts associated with the budget, as confirmed by the parliament’s press-service.

Next year’s consolidated state budget revenue is planned at EUR 9.9 billion and expenditures – at EUR 10 billion. Base budget revenue in 2020 is planned at EUR 6.9 billion, whereas expenditures – at EUR 7.2 billion.

Budget deficit next year is planned at 0.3% of GDP, whereas GDP growth is expected to be 2.8%, which is the smallest in recent years.

Ministries have reviewed their expenditures, and money saved this year will serve as boost for all sectors. The government plans to increase the lowest wages in the country, as well as maximum differentiated non-taxable minimum to EUR 300. A year from now it is planned to increase minimal wages to EUR 500 a month, as explained by Saeima’s Budget and Finance Committee chairman Mārtiņš Bondars.

Next year it is planned to divert EUR 228.7 million to the social sector. One of the main planned activities there is the increase of the state social guarantees. It is planned to be set at EUR 80 instead of the current EUR 64.03. This will also increase benefits for disabled people, as well as minimum amounts of disability pensions.

There are also plans to increase the minimal retirement pension. It will no longer depend on the state guarantee benefit. Its calculation will be based on the state-approved basis, which is generally planned to be EUR 80.

It is planned that starting with 2020 a number of benefits will no longer depend on minimal monthly wage amount.

It will affect guaranteed subsistence funds, as well as minimal subsistence amount for child care in foster families. It is planned to outline the guaranteed subsistence funds in law. The Cabinet of Ministers will set the subsistence amount for children in foster families. Subsistence amount will remain unchanged. Depending on the country’s economic situation and budget capabilities it will be possible to review benefit amounts.

More on this topic: Minister: Latvia’s budget for 2020 allocates funding for healthcare and other sectors

Additional funds will be provided to help increase wages. This includes EUR 23 million to help increase the lowest wages of teachers to EUR 750 a month, EUR 42 million will be allocated to increase wages to healthcare workers, EUR 0.5 million for wages of Constitutional Court employees and EUR 5.9 million for wages of people employed in judicial sector. On top of that, additional funds are planned to be allocated to help increase wages of employees of the State Probation Service, prison staff, people employed in the interior affairs system and culture sector.

EUR 7.9 million is planned to be diverted to help sort roads and develop electronic communications, whereas EUR 5.9 million is planned to help improve operations of the media. This includes helping public media exit the advertisement market and efforts to strengthen security of the information space. Funding of EUR 1.1 million is planned to be provided for the administrative territorial reform.

Funding increase of EUR 63.1 million is planned to finance municipalities and their main operations. This is 3.6% more when compared to the amount provided in 2019. This includes funds for teachers’ wages and road maintenance.

Next year, in continuation of efforts to combat grey economy, it is planned to enhance the involvement of tax administration in promotion of honest entrepreneurship by providing the right to inform tax payers about their potential business partners’ risks in regards to value added tax. There are also plans for activities to help provide convenient and quick public access to information stored in the Enterprise Register.

EUR 400 000 is planned to be diverted for prize money in the Receipt Lottery. EUR 1.8 million is planned to be allocated to open Latvia’s embassy in Australia.

1 November is set by the Saeima for the second reading of the state budget project. The final reading is scheduled for 13 November.

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