Investment should primarily go to development of people's skills and knowledge - Indriksone

RIGA - When research and development goals are concerned, investment should primarily go to people's skills and knowledge, and implementation of digitization solutions is also highly important as it plays a significant role in increasing productivity, Economics Minister Ilze Indriksone (National Alliance) said at a meeting of the National Economic Council on Monday.

At the meeting, the minister presented the "Tax Policy for Economic Transformation" strategy to business organizations and industry associations representing businesses and employees.

According to the Economics Ministry, the strategy is aimed at accelerating changes in the national economy, including promoting the development of human capital and productivity, attracting investment, and streamlining the business environment and the tax system.

"The key words for growth are labor force, investment and productivity - it is the increase in productivity that will be the most important factor determining the standard of living and the country's ability to compete on the global market," said Indriksone.

In order to promote the development of human capital and productivity, it is important to achieve equalization of labor taxes among the Baltic countries, streamlining of tax payments and easing the administrative burden, development of a flexible labor market and implementation of motivational measures to foster the return of labor force to the labor market, as well as raising qualifications of the workforce and promoting regional mobility, including measures to promote the availability of housing and development of transport infrastructure.

On the other hand, in order to attract investment it is essential to promote business development in the regions, as well as development of real estate and curbing the shadow economy. As important is reforming the tax system, which should be carried out with the aim of promoting the development of human capital and productivity, and drawing investment.

Council members generally agreed with these proposals, opining though that the priority should be business development, promoting investment attraction, facilitating operations of small businesses, encouraging businessmen to invest in innovation, raising productivity and employee education, as well as fostering creation of new jobs in the regions and workforce mobility.

The council also agreed that the government should agree as quickly as possible on feasible measures for transformation of the Latvian economy and start implementing these measures in earnest.

The Economic Council is a consultative institution formed by the Economics Ministry, Latvian Chamber of Commerce and Industry, Latvian Association of Local and Regional Governments, Free Trade Union Confederation of Latvia and the Latvian Employers Confederation. The council's mission is to deal with professional entrepreneurship related issues, involving business associations and independent experts in the process.