According to a statement by the International Monetary Fund (IMF) Latvia should not change the flat rate of personal income tax. As in previous years the IMF has recommended that Latvia should adjust the tax thresholds rather than change the rate. The IMF has expressed support for Latvia’s process of steady fiscal consolidation.
In 2012 plans to reduce the individual income tax rates were postponed after IMF advice, and instead of this the rate of social security contributions was reduced by one percent. The individual income tax rate was however reduced to 24 percent in 2013.
