Latvia's Finance Minister: Tax policy reform is a good example of new policy initiative

RIGA - The Finance Ministry proposals for tax policy changes is a good example of a new policy initiative, Finance Minister Dana Reizniece-Ozola (Greens/Farmers) told the press after the Cabinet of Ministers meeting today.

She said that this year the ministries had been asked to submit requests for allocations in the 2018 budget for two types of measures - the current needs and the new policy initiatives - so that they would not get mixed up and it would be easier to make decisions.

"When reviewing the proposed new policy initiatives, the Finance Ministry will focus on the effectiveness of the measures to see whether they would help with structural reforms or stimulate the economic growth," the minister explained.

The new tax policy proposed by the Finance Ministry is a good example of a new policy initiative, she said. "With the implementation of the new tax policy, we would generate extra income for the economy and ensure competitiveness," Reizniece-Ozola said.

As reported, the Cabinet of Ministers in an extraordinary meeting today supported a draft decision on the medium-term budget framework for 2018-2020, and the schedule for preparing 2018 draft budget.

In line with the budget drafting schedule, ministries by June 1 have to submit their proposals on priority measures and the necessary financing to the Finance Ministry and the Interinstitutional Coordination Center. In June the government will also revise the bills related to the tax policy guidelines.

By August 8, the fiscal space will be estimated and the Cabinet of Ministers will decide on the initiatives that will receive additional financing.

The Cabinet of Ministers plans to review the budget and related bills in September and approve them on October 10. The budget and the related bills should be submitted to the parliament on October 12.