RIGA - When deciding on tax policies, the government must make sure they do not hurt the least protected groups of society, representatives of the Welfare Ministry said, commenting the State Audit Office’s report which claims that tax rebates and allowances are granted without a particular purpose and that often they only bring losses to the government budget.
The ministry’s representatives said that as it works on tax policy guidelines for the next period, the Finance Ministry intends to work out a timetable for defining the goals and purposes of each particular tax allowance. The Welfare Ministry is determined to take an active part in this process.
The Welfare Ministry stands by its position that the tax policy has to be developed so that it does not hurt the least protected groups of society, providing them with allowances as far as it is possible.
In its report, the State Audit Office has called for a revision of Latvia’s tax allowance system, scrapping the necessary allowances.
According to the report, the national budget loses around EUR 2.5 billion in unpaid taxes annually due to the more than 200 various tax allowances available to individual and corporate taxpayers in Latvia. So far, no systematic assessment has been carried out to determine which tax allowances are really necessary and what purpose they serve.