Taxes do not need to be reduced to compensate for rising electricity and heating prices - Reirs

RIGA - Reducing a tax to compensate for rising electricity and heating prices is not the best solution, as there are other mechanisms to help low-income residents, Finance Minister Janis Reirs (New Unity) told LETA in an interview.

"On electricity prices, we have mechanisms to help needy residents, and these mechanisms work. If necessary, we will increase these mechanisms. But tax cuts, this is not necessary," said Reirs.

The Minister of Finance emphasized that the need to help the needy must come first, and he does not think that there are many countries at the moment that are assisting all residents in regards to the increase in electricity and heating prices.

"All I have heard is that a planned increase in excise duty has been suspended in one country - but it is a deferred increase, not a reduction in the tax. There is information on support in Italy of up to EUR 2 billion, which is very encouraging for some. However, when recalculated against Italy's gross domestic product, it is a very small amount. In addition, this is also a very targeted support for the less fortunate," said Reirs.

According to him, any reduction or abolition of the tax until the spring is by no means a solution.

"We also don't know how long this rise will last, and experts believe it is a short-term, speculative phenomenon," Reirs said.

He stressed that this issue is clearly in the focus of the government, and there will be assistance for low-income residents.

As reported, the coalition on Monday agreed on EUR 20 compensation payments to cover the rising cost of energy resources for senior residents who have been vaccinated against Covid-19, Prime Minister Krisjanis Karins (New Unity) said after the coalition parties' meeting on Monday.

The coalition yesterday supported the Finance Ministry and Welfare Ministry's vaccination promotion program aimed at senior citizens, said Karins. Elderly residents make up one of those groups that are the most prone to contract the coronavirus, and today the coalition agreed on compensation payments to vaccinated pensioners that would be paid over the next few months, Karins emphasized.