Self-employed persons in Latvia who are paid less than minimal wage will pay taxes proportionate to 10% of their earnings starting next year, as agreed by parties of the ruling coalition.
Prime Minister Krisjanis Karins said after meeting with parties of the government that on November 16 it was possible to resolve the remaining matters related to next year’s state budget. Politicians agreed that instead of social services tax payment control would be performed by the State Revenue Service.
Raivis Dzintars, leader of the National Alliance, explained that persons whose income was below the minimal wage threshold would pay for their actual earnings, not above it.
Dzintars said the coalition agreed on a duty for self-employed persons to submit declarations once a quarter, as well as pay 10% tax rate from their actual earnings.
Welfare Minister Ramona Petravica, as well as head of Saeima faction of Attistibai/Par! Daniels Pavluts said that self-employed persons would have to submit affirmation of their pay prior to the quarter in which they expected to receive income below the country’s minimal wage.
Petravica explained that this approach would be introduced in order to divide those who could but didn’t want to pay social contributions from those who were financially unable to pay it. For amounts that exceed minimal wages self-employed persons will likely have to pay 30.6% tax rate starting with July 1, 2021, but this still requires discussing.
Pavluts noted it is important for the new mechanism to be comprehensible and convenient to use. (BNN/Business World Magazine)