Government improves micro-business climate

RIGA  - The government has planned a series of measures to support micro-enterprises, said Prime Minister Valdis Dombrovskis (New Era) in an interview, reports news agency LETA. He emphasized that stimulation of the economy, including support measures for micro-enterprises, is one of the government’s three priorities.

“Since last spring I have met several times with professionals in this area for discussions on the necessary package of legislative reforms. The objective is clear - it is necessary to assist people left without work to look after themselves. The creation of new enterprises reduces social tension and unemployment, as well as develops business skills. The first success stories have already been noted in the media,” explained Dombrovskis.

The majority of decisions on micro-enterprise support were taken when the 2010 budget was approved. For example, administrative and registration procedures were simplified, and capital requirements were lowered. Also, from Jan. 1, a license fee was introduced - a fixed tax payment for individuals who run businesses in certain spheres. For example, tailors and dressmakers, chimney-sweeps, hairdressers, and mushroom-collectors can pay a fixed sum of money which includes income tax and social insurance contributions.

Other measures to be included in the new Law on Micro-enterprises include the possibility to pay salaries of up to 500 lats (714 euros) without paying additional income tax or social insurance contributions. These contributions will already be included in the single fixed payment. The owner will also be able to employ family members without having to establish legal employment relationships.

The head of the government stressed that at present, the essential thing is to pass the new law as quickly as possible. Several ministries are actively working on this, including the Finance Ministry and the Ministry for the Economy. The first draft has already been put together and is under discussion.

“The government will decide on the bill in the near future,” promises Dombrovskis.
The premier also stresses that this year loans will continue to be available to businesses for improving competitiveness, and support will continue to be provided for self-employment and creation of new businesses through the Latvian Mortgage and Land Bank. “More financial instruments will be added in the next few months,” he said.