RIGA - The negative impact of Riga Satiksme municipal public transport company on the government budget has reduced significantly, the ministry said in its report that has been submitted to the Cabinet of Ministers.
As reported, according to the European System of Accounts (ESA) methodology, which compiles statistics on fiscal indicators of the European Union member states, Rigas Satiksme should be included in the general government sector, which will reduce the fiscal space of the 2020 state budget by EUR 71.9 million, the Finance Ministry said earlier.
In order to compensate for the negative impact of Rigas Satiksme on the state budget, EUR 38 million from personal income tax revenue collected by local governments will be shunted to the state budget in 2020.
The Riga City Council turned to the Finance Ministry with a request to adjust the sum of the compensation, taking into account the amended forecast of Rigas Satiksme's impact on the state budget. The comapny has decided to postpone its investment plan for 44 buses, 25 trolleybuses and 13 trams, and thus, the estimated negative impact on the state budget has shrunk to EUR 28.4 million.
Thus, the Finance Ministry will propose the Cabinet of Minister to reduce the compensation to be paid by Rigas Satiksme to EUR 12.664 million accordingly.