In the first seven months of 2020, Latvia’s State Revenue Service (VID) collected taxes of EUR 5.555 billion, which is EUR 453.635 million or 7.5% less than the initially expected amount, according to information published by the service.
When compared to the same period of 2019, VID’s total collected general budget revenue has declined EUR 67.951 million or 1.2%.
“VID’s collected budget revenue was affected by the state of emergency announced to limit the spread of COVID-19 and the restrictions that remained in place when the state of emergency was lifted,” VID representatives say.
The service notes the biggest revenue reduction observed in seven months of 2020 in comparison to the same period of last year was for value added tax. In seven months of 2020 VAT revenue formed EUR 1.347 billion, which is EUR 109.119 million or 7.5% less when compared to the same period of 2019. VAT was collected in the amount of EUR 234.4 million or 14.8% less than initially planned.
To support taxpayers, VID continues repaying overpaid VAT amounts in accordance with the Law on the Suppression of Consequences of the Spread of COVID-19 Infection. So far VID has paid EUR 560.57 million of VAT.
According to data from VID, the total amount of VAT detailed in declarations in seven months of 2020 declined 9.4% when compared to the same period of 2019. The most rapid decline was observed for export transactions and business deals applied with reduced VAT rate.
Because of measures to prevent the spread of COVID-19, there has been a reduction of revenue from labour tax. While in three months of 2020, when compared to 2019, labour tax revenue had increased by EUR 70.33 million, labour tax revenue had declined EUR 68.21 million in the seven months of 2020. The biggest reduction was observed from taxpayers whose main economic operations are related to transport and storage, as well as housing and catering services.
State social insurance contributions in seven months of 2020 were performed in the amount of EUR 1.967 billion, which is EUR 37.33 million or 1.9% less than collected in the same period of 2019. State social insurance contributions were collected in the amount of EUR 119.764 million or 5.7% less than what was initially planned.
At the same time, personal income tax revenue in seven months of 2020 was EUR 989.544 million, which is EUR 31.28 million or 3.1% less when compared to the same period of 2019. At the same time, in seven months PIT revenue turned out EUR 27.543 million or 2.9% larger than expected.
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