Kampars wants 12 percent tax rate

RIGA - Latvia’s Economy Minister Artis Kampars (New Era) still hopes that a compromise will be reached and a fixed tax rate of 12 percent of turnover will be set for micro-enterprises, reports news agency LETA. Kampars in an interview with Latvian State Radio said that he believes that such a rate would stimulate not only the creation of new enterprises and the solution of the country’s unemployment problems, but would also result in a reduction of the proportion of the shadow economy.

As the minister indicated, this proposal for a reduction in the tax rate, along with other proposals on micro-enterprise taxes, has been submitted to the relevant Saeima committees for examination. The minister hopes that the proposed bill on micro-enterprise taxes will be approved by the Saeima in the near future, and with this it will be possible to implement a full support program for these small companies.
“We are trying to find a compromise so that everything is in order in terms of the Constitution,” indicated the minister, adding that “if we wish to work, then this is an easy tax to administer, almost two times lower than what businesses are currently paying.”

On April 29, Saeima gave conceptual support to a bill on a micro-enterprise tax which foresees a fixed tax payment of 20 percent of annual turnover for this type of business. The new law is planned to come into force on July 1, 2010.
Meanwhile, the Saeima’s Budget and Finance Committee, while examining the bill, after long discussions agreed to set a tax rate for micro-enterprises of nine percent. At present, Latvian legislation does not define a special status for this kind of business and does not set for them a separate tax rate.