On October 17, 2013 the Latvian parliament adopted the draft of the 2014 budget, a draft of the medium-term budget for 2014-2016 and 38 related amendments in the first reading.
Next year’s budget revenue is planned at EUR 7 billion, and expenses at EUR 7.14 billion. The budget deficit will likely be 0.6% of GDP. Revenue of the state consolidated budget (including municipalities) is planned at EUR 8.58 billion, and expenses at EUR 8.75 billion. Therefore, the state consolidated budget deficit is planned at 0.7% of GDP.
The priority of the next year’s budget project includes measures to reduce income inequality by giving larger tax benefits for residents with low income and families with children. Another priority is the improvement of the country’s demographic situation, including support for young parents and childcare. It is also planned to provide free lunches for 1-3 grade schoolchildren. The government plans to reduce social insurance fees by 1%, and increase benefits for dependants to EUR 165. The personal income tax rate will be kept at the current 24%. It is also planned to increase minimum salaries to EUR 320, restore pension indexation and increase salaries for doctors, teachers, police officers fire fighters and others in 2014.
A number of measures are planned to strengthen Latvia’s competitiveness, including:
- Regional development;
- Service availability for residents;
- State road infrastructure maintenance;
- Investment attraction in national economy;
- Research and production; and
- Introducing several tax administration benefits for entrepreneurs.
The 2014 budget plan also provides for introducing increased taxes on improperly managed buildings of cultural heritage and unfinished construction sites. Taxes will also be increased for LPG, product packaging, old and used vehicles, fireworks and gambling.
