Amendments to Solidarity Tax Law, setting solidarity tax rate at 25.5%, to take effect January 3

RIGA - Amendments to the Solidarity Tax Law, which stipulate setting the solidarity tax rate at 25.5 percent, will come into force tomorrow, January 3, according to a statement printed in government gazette Latvijas Vestnesis today.

As reported, it was originally proposed to increase the tax rate to 35.09 percent, but Saeima eventually decided that the solidarity tax would be 25.5 percent. In line with the amendments, 1 percent of the tax will be used to finance health care services, 14 percent will be used to fund state pensions, and 10.5 percent will be paid as personal income tax.

According to outgoing Finance Minister Dana Reizniece-Ozola (Greens/Farmers), the solidarity tax rate of 25.5 percent is a compromise and has a neutral fiscal impact.

LETA also reported, Saeima approved the amendments after the Constitutional Court ruled that Section 6 of the Solidarity Tax Law was not in line with the principle of equality enshrined in the Constitution.