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Finance Minister of Latvia supports low taxes

By Editor. 25.09.2009

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Despite the proposals to raise several taxes in next year, Finance Minister Einars Repse supports the low tax policy that Latvia has been using so far.

Repse underlined in an interview for the Latvian State Television's broadcast What's Happening in Latvia yesterday that Latvia's tax burden, around 27% of the gross domestic product, is very low when compared with a 39% average in Europe. Repse admitted that taxes should not be increased during a crisis, however, now it is the only choice possible. Still, only two taxes will be raised. He regrets that the proposition to set a higher tax rate for property tax was spurned by Saeima without even discussing it in detail, writes LETA.

 Chairman of the People's Party, Mareks Seglins pointed out his party supported increasing the personal income tax and the capital gains tax, however, taking in consideration residents' lower purchasing capacity, People's Party is against introducing a higher property tax. Repse believes it is better to economize by completely giving up some state functions instead of partly reducing them and providing perfunctory services. Seglins agreed, adding that if funding for a state function is curbed by 50%, it is actually impossible to continue providing it.