The 2026 budget proposes diversifying revenue sources through higher gambling and excise taxes, while supporting investment and easing living costs with tax law amendments and a temporary VAT cut on basic foods starting July 2026.
Latvia’s Finance Minister has initiated discussions with social partners and government representatives regarding the 2026 draft budget and associated tax proposals on 19 September 2025. The primary focus of these proposals is not to raise taxes but to explore alternative revenue streams.
The most significant measures include dividends from state-owned companies, an increase in gambling tax rates from 2026, and stricter restrictions on harmful goods by increasing excise duties on alcohol and tobacco.
To encourage investments, draft amendments to the Corporate Income Tax Law and the Individual Income Tax Law are also being introduced.
The government is also focused on enhancing security and support for families for the 2026 budget. It is proposing an increase in the minimum monthly salary from EUR 740 to EUR 780 starting in 2026.
Additionally, a temporary reduction in the VAT rate for essential food items such as bread, milk, eggs, and fresh poultry is planned for one year, beginning on 1 July 2026.
