PM skeptical about reducing VAT on certain goods

• Published date: 06 May 2022
• Publication title: LETA

RIGA, May 6 (LETA) - Prime Minister Krisjanis Karins (New Unity) is skeptical about the possibility of reducing value added tax on certain goods as this would not attain the expected results.

In an interview with TV24, Karins said there was no guarantee that residents would see prices decrease if the VAT rate was reduced, given that retailers, intermediaries and producers would try to keep their profits. He also said that reducing VAT rate was not targeted aid, and that reducing VAT would disproportionately benefit those members of society who spend more money on a daily basis.

"This is exactly what we don't want. We want to help those who have no money to spend, who really need help. I would like to say once again that targeted support is better than general support," said Karins.

Reducing the VAT rate would make it harder for the state to honor its commitments, such as increasing the defense budget and reallocating funds to purposes for which it is now more necessary, said Karins.

In the interview...