Portrait of an Ascending Sovereign Credit
Tax changes
Key goals: decrease of income inequality and promotion of economic competitiveness
Principles of the tax changes
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Raise disposable income of employees and induce private consumption
More competitive entrepreneurs on regional and global scene as well as stimulation of own investment
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Better capitalized businesses, more opportunities to raise additional funds for development
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Increase prospects to raise production capacity of goods and services, more effective and efficient production process
More equality between different income groups and types of income
Higher tax revenue resulting from increased economic activity and less tax avoidance
Main tax changes realised in 2021
Increase of the income threshold up to which the
differentiated non-taxable minimum is applied
(from EUR 1200 per month to EUR 1800 per month)
The rate of the compulsory state social security contributions
is reduced (from 35.09% to 34.09%)
A minimum social security contribution object for employees
whose monthly income does not reach the amount of the
minimum wage is introduced
Reorganization of the micro-enterprise tax regime
(the tax rate increased to 25% up to turnover of EUR 25'000 and
40% for the excess amount)
Gradually increase of excise duty on tobacco products and
changes in vehicle taxes, etc.
Increase of the minimum salary
from EUR 430 to EUR 500 in 2021
Source: Ministry of Finance
Main tax changes from 2022
(adopted by the Parliament (Saeima))
Increase of differentiated non-taxable minimum and non-
taxable minimum for pensioners
(as from Jan-2022 EUR 350 per month; as from Jul-2022 EUR 500
per month)
Reduction of the VAT rate for books, press and other mass
media issued in the form of printed or electronic publication
(from 12% to 5%) and e-books, newspapers and periodicals and
media content in digital format (from 21% to 5%)
Inclusion of the employer's health service in the benefits
provided for in collective agreements with a limit of 480 euros
per year
Increase of the maximum social security contribution object
(from EUR 62'800 to EUR 78'100)View entire presentation