Saeima turns down Harmony Center’s proposal to reduce VAT on heating

RIGA - Today, Saeima voted down amendments to the law "On Value Added Tax" (VAT) proposed by Harmony Center, which stipulated reducing value added tax on heating from 12 percent to 5 percent.

Harmony Center's amendments proposed reducing the tax rate for households for a period until January 1, 2015.

"Many residents of Latvia were shocked when they received their heating bills in January. Compared to 2011, heating bills have increased by 60 percent to 70 percent. It is obvious that thousands of families will be unable to pay their heating bills on time," explained MEP Ivars Zarins (Harmony Center), adding that heat suppliers would fail to generate profit, whereas the state would not receive the planned revenue from VAT on heating.

Harmony Center also informed the parliament that, according to the Latvian Association of Local and Regional Governments, already last year 40 percent of households were unable to timely pay for heating, and that debts for heating had already reached 26 million lats.

Harmony Center had also submitted similar amendments twice last year, but the amendments were turned down by Saeima.