Finance and economics ministers to discuss support for businesses due to increasing prices of energy resources

  • 2022-08-15
  • LETA/TBT Staff

RIGA - Finance Minister Janis Reirs (New Unity) and Economics Minister Ilze Indriksone (National Alliance) will meet on Monday to discuss support for businesses due to the increasing prices of energy resources.

In an interview with Latvian Television this morning, Reirs said that he and Indriksone would also discuss the fiscal impact of such support measures.

The experience of providing support for residents due to the rising prices of energy resources last winter makes Reirs hopeful that support for residents will be sufficient next heating season as well, but other support options, including support for businesses, also need to be discussed.

As reported, legislative amendments, partly compensating for heating bills to households, have come into force.

The total sum of the support package is around EUR 442.25 million.

The measures provide for partly covering the energy resource price hike from the state budget, applied in six directions of support - centralized heating, natural gas used for heating, electricity used for heating, wood pellets, briquettes and firewood.

Reirs believes that Latvia still has good opportunities to borrow as Latvia maintains good credit ratings.

According to Reirs, budget revenue is also satisfactory, and that is not only due to inflation. This money will not be kept in government coffers, which would theoretically help lower inflation, it will be go back to residents.

The government is not considering lowering excise and value-added taxes as an option to lower prices, because such measures have a stimulating effect on consumption, and therefore on inflation.

On the other hand, the government and social partners are considering opportunities to reduce labor taxes, which may take several years, Reirs added.