On Thursday, the Saeima deputies adopted in the final reading all 47 draft laws accompanying next year’s budget, opening the way for discussions on the State Budget Law for 2026 and the budget framework for 2026, 2027 and 2028.
Deputies began work on next year’s budget on the 3rd of December.
A total of 290 proposals were submitted for the State Budget Law for 2026 and the budget framework for 2026, 2027 and 2028. Previously, the Saeima Budget and Finance (Taxation) Committee supported only a few amendments to next year’s budget, all submitted by opposition deputies.
Among other things, the Saeima adopted several amendments to laws that will increase support for families with children starting next year.
The adopted amendments to the Law on State Social Benefits provide that the parental benefit will now be paid until the child reaches 1.5 years of age, instead of the current two years. At the same time, the benefit amount will increase from 171 euros per month to 298 euros per month. For children born up to the 2nd of November next year, the benefit will continue to be paid from 1.5 to 2 years of age in the amount of 42.69 euros, as has been the case to date.
Changes will also apply to the family state benefit for children who study.
Specifically, the benefit for a child aged 16 to 20 will also be available if the child is studying at a college or full-time at a university and is not married. This means that families with young adults in higher education will again receive the benefit until the age of 20. Currently, the benefit is paid only for children studying in secondary or vocational school.
From next year, the one-time childbirth allowance will also increase to 600 euros. At present, this allowance is 421.17 euros.
The deputies also adopted amendments to the Value Added Tax Law introducing, from the middle of next year, a reduced 12% VAT rate for certain basic food products.
The amendments aim to mitigate the impact of rising food prices on household well-being. The VAT changes are part of the State Budget Law for 2026 and the medium-term budget framework.
The reduced 12% VAT rate will apply to rye, wheat, mixed-flour and gluten-free bread,
including pasteurised or frozen bread with or without additives. It will also apply to polar bread, various bread rolls, buns, burger buns, lavash, tortillas and pita bread. The reduced VAT will not apply to pastries, pies, croissants, or other confectionery items, nor to crispbreads, rusks, croutons, breadcrumbs or breadsticks.
The reduced VAT will also apply to fresh, sterilised or pasteurised cow’s, sheep’s or goat’s milk, but not to ultra-heat-treated (UHT) milk or condensed/evaporated milk.
Fresh and chilled poultry meat — including chicken, turkey, duck, goose, guinea fowl and quail — will also be subject to the reduced VAT rate, including cut, boned, sliced and minced meat as well as offal. The reduction will not apply to frozen meat.
A 12% VAT rate will also apply to fresh, non-heat-treated poultry eggs in shells.
The reduced VAT rate for these food products is set to apply from the 1st of July next year until the 30th of June 2027.
On Wednesday, deputies also adopted amendments to nine laws that will introduce gradual changes to the existing early-retirement pension system from 2027.
The changes aim to ensure a fair, equitable and financially sustainable early-retirement system compared with the rest of society. The draft laws are linked to the 2026 State Budget and the medium-term budget framework.
Deputies began the day’s budget work at 9:00.
Next year, consolidated state budget revenues are planned at 16.1 billion euros and expenditures at 17.9 billion euros.
Compared to the 2025 budget, next year’s revenues are projected to be 944.6 million euros higher, while expenditures will be 804.3 million euros higher.
The budget deficit next year is planned at 3.3% of GDP.
Its increase compared to this year’s projected 2.9% deficit is mainly due to significant additional funding for national defence and security, long-term support for Ukraine and investments in public safety.
Next year’s key state priorities are national security, support for families with children and high-quality education, which will receive an additional 693.5 million euros in total.
Taking into account the geopolitical situation, 448.3 million euros in additional funding will be allocated to strengthening national security next year. This includes not only military capability development but also investments in internal security and cybersecurity.
Additional funding of 94.8 million euros in 2026 is planned to strengthen support for families with children and to improve material support for children in out-of-family care. The childbirth and parental benefits will increase, and greater support will be provided to guardians and adoptive parents.
To ensure access to high-quality education for all children in Latvia regardless of place of residence or school size, 45 million euros in additional funding will be allocated to implement the new teacher remuneration model “Programme at School”, including support staff for teachers.
A further 105.4 million euros will be allocated for other measures, including in healthcare.
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