Saeima approves budget; promises to reduce social inequality

After twelve hours of debate, Saeima has passed the 2014 state budget bill in the final reading shortly after midnight, reports LETA.

A total of 55 MPs voted for the budget, 38 were against. The budget bill was largely passed without any unexpected surprises, except a few proposals that were approved without having been harmonized within the ruling coalition.

The priorities in next year’s budget include reducing social inequality by introducing larger tax breaks for low-income residents and families with children, tackling demographic problems, including higher support for young parents, and continuing measures against the shadow economy.

The central government’s consolidated budget revenue is projected at 7 billion euros next year, with expenditures of 7.2 billion euros.

Central government basic budget revenue is planned at 5 billion euros; expenditures of 5.3 billion euros.

The largest additional funding - 17 million euros - will be allotted to improve the demographic situation in Latvia.

The 2014 budget bill also stipulates that local governments will receive 80 percent of personal income tax revenue next year, whereas the state budget will receive 20 percent. The personal income tax rate next year will be 24 percent, the monthly non-taxable minimum income will be 75 euros, and tax breaks per dependant at 165 euros.

Employee social insurance contributions will be reduced from 11 percent to 10.5 percent next year, employer social insurance contributions - from 24.09 percent to 23.59 percent. The minimum monthly wage will be raised to 320 euros next year.

Public sector workers - doctors, teachers and those working in interior, justice, social and culture areas - will get pay raises.