Finance Ministry Wants System of Tax Breaks Revised

RIGA, Feb 27 (LETA) - Every year the budget shortfall due to tax breaks is EUR 2.5 billion, which is why the Finance Ministry is proposing to revise the system of tax breaks, the ministry's representatives told Saeima Budget and Finance Committee today.

Internationally, the broader definition "tax expenditures" is preferred to define reducing or postponing taxes for a comparatively small group of taxpayers, the ministry's representatives explained.

Currently, tax breaks and exemptions in Latvia annually amount to EUR 2.5 billion on the average, which makes up approximately one-third of total tax revenue, the Finance Ministry's representatives said.

According to the Finance Ministry's estimates, personal income tax exemptions annually amount to approximately EUR 900 million, corporate income tax breaks - approximately EUR 300 million or about 75 percent of total corporate tax revenue, and natural resource tax exemptions - approximately EUR 200 million - which is almost eight times more than the total revenue from natural resource tax.

Excise tax breaks annually make up EUR 146 million which, compared to other tax breaks, is not much - 16 percent of the total excise tax revenue, while property tax...