RIGA - Latvian Finance Minister Oskars Spurzins has confirmed that planned income tax cuts, originally scheduled for 2008, will not be going ahead.
"There are no such plans for next year. In a situation, when we have high consumption, the government has agreed that we will not reduce individual income tax," Spurdzins told the Dienas Bizness newspaper.
In 2006, the government floated plans to cut personal income tax to the same level as corporation tax 's 15 percent 's which would have given Latvia one of Europe's most attractive tax regimes for individuals and investors. However, with the economy overheating, reducing the tax burden on individuals could further fuel consumer spending, which in turn would push up inflation.