Latvia cannot afford raising taxes for people employed “under the standard tax regime”. However, they may increase for people employed in discount tax regimes, said Latvian Prime Minister Krišjānis Kariņš in an interview told local media.
The prime minister repeated that coalition talks about tax changes are very difficult, because each of the five parties has a slightly different vision. He does hope, however, that parties will find common ground because work in the coalition is active, adding that the government plans to discuss this topic today.
Kariņš said it was rather irresponsible of the state to allow residents legally work in tax regimes that do not provide them with social benefits.
The prime minister admits next year’s budget talks will be complicated, because as a result of COVID-19 crisis the country’s revenue has declined and the need for money has only increased.
In an attempt to reduce consequences from the crisis, the government has approved the first portion of measures that provide for adopting a number of new and expanding existing employment support measures.
According to the prime minister, the second portion of measures is expected to be delivered from Economy Ministry and it is planned to provide more support for exporting companies so that they are able to afford reducing production output while external markets are recovering.
Kariņš would like the state to make sure there is no second COVID-19 wave instead of waiting for it.