Vejonis: We are in the final stage of deciding on tax reforms important for the whole country

RIGA - After a meeting with Prime Minister Maris Kucinskis (Greens/Farmers) today, President Raimonds Vejonis said that the decisive moment in making decisions on tax reforms is upon the government, which will be an important moment for the whole country.

Vejonis said that these decisions on tax policy will also be in a way a review of the government's work, which will show whether the coalition will be able to come to agreements. The president also pointed out to the importance of these tax reforms to the public and emphasized that from these decisions will also be important for further reforms in healthcare, education and the state administration.

''We cannot let down our business sector, as they expect a stable tax policy vision so that they themselves can plan their own investments. Second, of all, this is important for the public, as they too must plan their incomes and expenditures,'' he emphasized.

Meanwhile, Kucinskis said that the government, together with social partners, are prepared to move forward with the said reforms.

He emphasized that soon it will be possible to evaluate with has been achieved, and understand the overall support for tax policy matters.

''Today's first reform task force meet will serve as a catalyst so that we can understand the current situation and support for the reforms,'' Kucinskis said.

As reported, the Finance Ministry is proposing reducing personal income tax to 20 percent from the current 23 percent, lifting the so-called solidarity tax, and keeping the microenterprise tax.

According to the reforms proposed by the Finance Ministry, personal income tax of 20 percent will apply to annual incomes of up to EUR 45,000, while higher incomes will be applied 23 percent income tax.

The ministry has also proposed a 20 percent corporate tax on distributed profits.

According to the Finance Ministry, the average wage in Latvia is EUR 910.5 a month before tax and EUR 641.3 after tax this year. After the reforms, the average wage after tax will be EUR 680.9 a month.

The ministry proposes increasing the tax-exempt minimum income and, subsequently, non-taxable pension amount could also be increased, up to EUR 500.

Value added tax will remain at 21 percent, but the Finance Ministry wants gradual increases in excise tax rates to be considered.