RIGA - Latvia’s Transport Ministry will offer a new proposal regarding a controversial port tax, because it finds the option offered by the Economy Ministry unacceptable, Transport Minister Anrijs Matiss said during a Saeima Inquiry Committee meeting on Oct. 9, reports Nozare.lv.
The ministry will propose that corporate tax apply to port profits. In this case, the tax will not affect port tariffs, and municipalities and ports’ board members should be interested in increasing the ports’ profits.
Matiss also said that the Economy Ministry had in fact proposed a tax on port turnover, which would result in higher port payments and therefore a costlier transit corridor. Given the tough competition in the Baltic region, Latvian port cargo turnover will decrease, which in turn will make rail tariffs more expensive.
On Oct. 1, the government decided that Freeport of Riga Authority, Freeport of Ventspils Authority and Liepaja Special Economic Zone Authority would have to make the same payment into the state budget as they transfer to the three respective local governments - 10 percent of payments they collect in tonnage, canal, small ship and anchorage dues.
The Economy Ministry explained that the three key ports of Latvia - Ventspils, Riga and Liepaja ports - accounted for 98.19 percent of Latvian ports’ total cargo turnover in 2012. These ports collect payments from port clients that use port infrastructure, which is public property, but no taxes or duties apply to this port income.
The amendments to the Law on Ports are yet to be reviewed by Saeima.