Latvian PM: Plan for earmarking 1% of social tax for health care budget not part of tax reform

 

RIGA - The tax reform guidelines will not include the proposal about earmarking 1 percent of social insurance contributions for health care and a solution about additional financing for health care will be offered later.

Speaking to the press after the meeting of the ruling coalition parties today, Latvian Prime Minister Maris Kucinskis (Greens/Farmers) said that the proposal was not supposed to be included in the guidelines from the very start and it had been included in the document by mistake.

The proposal was to be left out of the document because the Welfare Ministry and the trade unions had raised objections to the idea about earmarking 1 percent of social insurance contributions for health care, the prime minister explained.

Efforts will be made to come up with a different solution to raise the necessary finances for health care, he said.

Finance Minister Dana Reizniece-Ozola (Greens/Farmers) said that one should not be mixing up two things - a tax strategy and the budget measures. If those two things are put together, expecting the tax strategy to offer solutions to just about every problem, it is mission impossible, she said.

The finance minister said that there would be clarity about financing for health care by the time the next year's budget would be drafted.

As reported, the draft tax policy guidelines for 2018-2021 included a plan for the medium term to earmarking 1 percent of social insurance contributions for health care, starting with January 1, 2020.