No increase of the tax burden as a result of the reform is acceptable, Prime Minister Krisjanis Karins has said after meeting with coalition partners.
Karins promised to do everything to ensure the government is able to look at Finance Ministry’s prepared report on possible changes to the tax system, put rumors to rest and provide full information to society.
The prime minister said the ministry’s offer provided a compulsory, at least minimal social fee so that all would have the option to request social assistance. At the same time, it is planned to amend the standard tax regime.
“Tax increase is not on the table. We have discussions about possible internal tax distribution, because we are aware we need three things – predictable funding for healthcare and teacher wages in the future, as well as resolve the issue with the Constitutional Court’s ruling in regards to guaranteed minimal income,” said the politician.
In the context of the New Conservative Party’s outlined need to discuss changes to the real estate tax, Karins said this topic was not under discussion in the context of the reform.
“I will not support simple increase of taxes, because the goal is sorting out the system,” said the prime minister, adding that there would be wide discussions in regards to new calculated cadastral value, which could cause a considerable increase of real estate rates, in order to prevent a possible increase of the tax burden.
The government needs to accept Finance Ministry’s report to “avoid speculations and scaring people”, said the politician, admitting society lacked in-depth understanding what the government regularly discussed.
The ministry’s prepared report provides for distributing part of the personal income tax and social tax in favor of financing healthcare without increasing the tax burden for working people.
The goal of the reform is sorting the tax system to make in fairer and to make sure the government has revenue from taxes to finance all social programs in the country. Karins stressed JKP’s offer to increase non-taxable minimum to EUR 500 would mean less money for the state budget.
“We are looking into this. There is no talk of reducing non-taxable minimum. I am in favor of increasing it, but we have to look how much we can afford without taking finances from other budget positions,” said the head of the government.
Justice Minister Janis Bordans is unhappy with the coalition’s discussions about the quality of the tax reform and content, stressing it is unfair to drop coalition partners’ offers for the reform.
“JKP wants a constructive resolution, but we in the government are far from such a solution. Complications come from possible tax increases in all sectors affected by the offer,” the politician says, adding that he believes it is necessary to reach a conceptual agreement about the reform.
At the same time, he stresses JKP will not accept any tax policy review if it does not include a revision of the real estate tax.
Culture Ministry’s parliamentary secretary Ritvars Jansons added his political party (National Alliance) believed the tax reform must not impact families with children. This is why the party will offer executing the reform together with the reform to the state benefit for families. His party will also hold talks with Finance Ministry in order to secure “fair and comprehensible taxes” for creative people as a result of the reform.
Economy Minister Vitenbergs says the possible solution in regards to increase of excise tax for tobacco products needs to be discussed with Interior Affairs Ministry, because the possible increase cannot be so big to assist with sales of illegal tobacco products. (BNN/Business World Magazine)
