Latvian Minister of Economics Viktors Valainis said in an interview to LTV programme Rīta panorāma on Friday, the 26th of April, that the country is short of 2-3 billion euros in investments.
He mentioned that the latest report about Latvia prepared by the Organisation of Economic Cooperation and Development (OECD) largely confirms what is being done in Latvia now. “The recommendations coming from OECD are also topics on our agenda,” he said.
Valainis also mentioned it is necessary to develop the capital market. “The volume of investments our economy needs is not five, ten or 100 million – it is 2-3 billion,” he said, adding that the only way to secure the influx of these financial resources is by reviewing the way Latvia’s national economy is financed, and development of the capital market is one of the prerequisites.
The minister also mentioned how the OECD report explained that the tax burden is too big for recipients of smaller wages. He also said the government is committed to finding a solution to make sure the labour tax burden for smaller wages in Latvia goes down.
“People cannot afford to pay such a tax burden. This is where grey economy forms,” said Valainis, adding that Latvia is not competitive on the level of Baltic Stated when it comes to labour taxes, especially in the wage group up to EUR 2 000.
As previously reported, the latest report from OECD stresses, among other things, the importance for Latvia to reform its tax system. The main problem, according to the report, concerns the high social contributions for residents with low and medium-sized income, which dissuades people from entering official job relations. Unofficial job relations are common, and personal income tax progressiveness remains low. To resolve these problems, OECD recommends lowering the labour tax burden for low-income residents.
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Latvia’s economy is short of 2-3 billion euros in investments, says minister
