The micro-enterprise tax has created serious defects for Latvia’s tax system, said Fiscal Discipline Council chairman Janis Platais.
“It has caused very serious defects to our tax system. It suffocates growth. It acts against the tax neutrality principle, when taxes should not stimulate one or the other form of business,” Platais said.
He believes Latvia is against the dominance of small and inefficient businesses.
“Larger, more efficient companies increase everyone’s wealth and reduce ineffective costs. Unfortunately, it is followed by higher prices, but it does force people to ask if they really need a service or product. I am not convinced economic growth should be based primarily on lifestyle companies, because then people will ask why we don’t live as well as old European countries,” Platais comments.
FDC is an independent collegial institution formed in order to provide monitoring over compliance with fiscal discipline requirements. (BNN/Business World Magazine)