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Tuesday 21.01.2020 | Name days: Agne, Agnese, Agnija

With 57 deputies present, Latvia’s Saeima adopts state budget for 2020

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budget 2020, approval, Saeima, debates, coalition, importantAfter two-days’ worth of discussions, Latvia’s Saeima finally approved the state budget on Thursday, 14 November, with 57 votes in favour, as reported by Saeima’s press-service.

According to information from Saeima’s website, the meeting concluded at 21:21 and only 57 parliamentarians had taken part in it. The opposition was absent.

A total of 161 proposals were received for the second reading of the state budget for 2020. None of the proposals submitted by the opposition were supported. The meeting dedicated to the final reading of the budget lasted more than a day – nearly 25 hours.

The Saeima also approved the law on medium-term budget content for 2020, 2021 and 2022, as well as amendments to 26 accompanying laws.

Next year’s state consolidated budget revenue is planned at EUR 9.9 billion and expenditures – at EUR 10 billion.

State base budget review in 2020 is planned at EUR 6.9 million, whereas expenditures – EUR 7.2 billion.

The budget deficit of the 2020 general government budget is planned at 0.3% of GDP, whereas GDP growth in 2020 is planned at 2.8%.

Ministries have reviewed their expenditures and increases are planned for all industries. The lowest wages are set to increase. Maximum differentiated non-taxable minimum will increase to EUR 300. In a year it is planned that minimal labour wage will increase to EUR 500, as reported by Saeima’s Budget and Finance Committee chairman Mārtiņš Bondars.

Additional funding of EUR 228.7 million will be diverted to the social sector, and one of the priority measures will be the increase of state social guarantees for disabled people. It is planned at EUR 80 instead of the current EUR 64.03. People suffering from disability since childhood will receive EUR 122.69 instead of EUR 106.72. The minimal amount of disability pensions will increase alongside state social guarantees.

Minimal retirement pension amount will also increase in Latvia next year. It will no longer depend on state social guarantee amount. Instead its calculation will use a calculation base set by the government. In general cases it is planned to be EUR 80.

A number of benefits will no longer be associated with minimal monthly wages. This will apply to state guarantees subsistence funds, as well as minimal subsistence amount for child care in foster families. The state guaranteed subsistence amount will be outlined in the law, whereas the subsistence amount for foster families will be set by the Cabinet of Ministers. The subsistence amount will remain unchanged. Depending on the country’s economic situation and budget capabilities, it will be possible to review benefit amounts.

Next year’s planned additional finances will be diverted to help increase wages. This includes EUR 60 million for doctors, EUR 23 million for teachers, EUR 2.3 million for workers of probation services and court workers, EUR 10.7 million for workers of the interior affairs sector, and EUR 8.3 million for culture workers.

Additional finances of EUR 4.3 million will be allocated for compensated medicines. EUR 3 million will be allocated to finance treatment of patients suffering from rare diseases.

EUR 7.8 million will be allocated to finance maintenance of roads. EUR 5.9 million will be allocated to help organize the media space. This includes the departure of public media from the advertisement market and enhancement of the information space. EUR 1.1 million is intended for the administrative territorial reform.

Municipalities will receive funding of EUR 63.1 million, which is 3.6% more when compared to 2019. This amount includes funding for teachers and roads.

Next year, continuing measures to combat grey economy, it is planned to enhance tax administration’s involvement in contribution to fair entrepreneurship, providing the right to inform taxpayers about potential risks associated with partners in value added tax. On top of that, measures are planned to ensure convenient and quick public accessibility to company registration information free of charge.

In the field of taxes, the biggest tax rate will be put on gambling machines, roulette games, card and dice games. Additionally, the tax rate will increase for certain natural resources. A new tax will be adopted – tax for burning waste. Tax relief on use of natural resources for production and co-generation of electricity will be abolished.

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