The parties of the Latvian government have reached an agreement on the general framework of the 2021 state budget and the planned tax reform.
“After several months of debates, we have agreed on the framework of the 2021 budget,” Prime Minister Krisjanis Karins said on September 21.
Karins elaborated that the budget of the next year would have a deficit of 3.9% of the gross domestic product, related to the pandemic of COVID-19. The overall size of the budget will be known later, when the government has the budget framework on its agenda.
It is planned that from January 1, 2021, the minimum wage in Latvia will be 500 euros. 183 million euros would be devoted to an increase in the wages of health care workers. The wages of teachers and academic staff will also be increased, Karins said.
To comply with the ruling of the Constitutional Court on the reform of the guaranteed minimum income, a decision was taken to increase it from 64 euros to 109 euros.
It is also planned from January 1, 2021 to reduce the social tax by 1% and to increase the threshold of the differentiated untaxed minimum from 1,200 euros to 1,800 euros. (BNN/Business World Magazine)
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