RIGA - Taking into account social and cooperation partner viewpoints and proposals on social insurance contributions and personal income tax breaks, Latvia’s Finance Ministry has drawn up an alternative proposal for labor tax reform, reports Nozare.lv.
The Finance Ministry proposes maintaining personal income tax at 24 percent, reducing it to 23 percent in 2015 and 22 percent in 2016. The ministry also suggests reducing employee social insurance contributions from 11 percent to 10.5 percent, and employer social insurance contributions from 24.09 percent to 23.59 percent. In addition, the ministry proposes increasing tax breaks for dependants to 116 lats (165.7 euros) to improve the demographic situation in Latvia and raising the non-taxable minimum from 45 lats to 53 lats.
The non-taxable minimum will not be differentiated next year.
Keeping its promise to reduce the tax burden on labor and taking into social and cooperation partners’ stances, the Finance Ministry has come up with a proposal for reducing labor taxes in the same amount as previously planned. At the moment, most EU countries are increasing their tax burdens; Latvia is nearly the only one working on tax cuts, Finance Minister Andris Vilks said in a statement to the media.