Next year’s consolidated state budget revenue is planned at EUR 14.5 billion, and expenditures are planned at EUR 16.2 billion, according to the state budget project for 2024, 2025 and 2026 conceptually approved by the Saeima on Thursday, the 16th of November.
53 Saeima deputies voted in favour, including out-of-faction deputies Oļegs Burovs and Igors Rajevs. 42 Saeima deputies voted against – all four opposition faction members and out-of-faction Saeima deputy Glorija Grevcova. No one abstained in the vote.
The Saeima added urgency to the legislative draft, as reported by the press-service. The final reading is scheduled for the 7th of December.
Compared to this year’s state budget, next year’s revenue is planned EUR 1.76 billion larger. Expenditures are planned EUR 1.54 billion higher when compared to the state budget of 2023. The general government budget deficit for next year is planned at EUR 1.3 billion or 2.8% of GDP.
It’s main priority is domestic and external security, education and healthcare.
The 2024 state budget, considering the existing geopolitical situation, the threat of hybrid war and economic challenges, was composed with a focus on state security and longevity. This is why additional investments into security, education and healthcare are investments into people, so that Latvia can face various shocks and challenges, said Chairman of the Budget and Finance Committee Jānis Reirs.
Next year’s additional funding outlined for various priorities in the state budget reaches EUR 783.3 million. EUR 486.4 million of this amount is planned to be diverted towards domestic and external security, healthcare services and their quality, as well as education.
Additional funding for security is planned at EUR 91.9 million.
This money will go towards wages of people employed in the interior affairs and justice sectors,
various external security measures, formation of important border infrastructure, border guard, cyber security, as well as expansion of capacity of firefighters and rescuers.
Funding for state defence next year is planned at 2.4% of GDP. As defence funding gradually goes up, it is planned to reach 3% of GDP by 2027.
In 2024 an additional amount of EUR 119.5 million is planned to be diverted towards various activities in education. A considerable amount of funding is planned to be diverted towards teachers with the lowest hourly rate. Additional funding is also planned for higher education, science and successful transition to studies in state language.
Additional funding will be provided to another priority – healthcare. The planned amount if EUR 275 million.
Funding will also go towards innovations and export, as well as support of startup companies. The state budget will also allocate funding towards households and farms that were damaged in various natural disasters.
Starting with next year is is planned to restore old-age and disability pension allowances, funding is provided to increase the remuneration for the provision of the assistant and attendant service to persons with disabilities.
Additional funding is planned to be allocated in order to expand Latvian school bag programme to a wider range of students.
In the tax field there are plans for support measures for small businesses, as well as reduction of the administrative burden. Instead of the two tax rates for micro enterprises (25% and 40%) there will be one 25% rate from turnover.
VAT is planned to be removed from residents’ participation in sports activities organised by associations and foundations. No VAT will be applied on fees for children’s camps.
Tax revenue is planned to be increased through inflation of tax rates on tobacco products, e-liquids, tobacco alternatives, alcoholic beverages, gambling, as well as fuel used by special economic zones and freeports.
Additionally, in order to ensure financing of priority activities, it is planned for credit institutions and lending service providers to perform an annual corporate tax surcharge of 20%.
Also read: Committee challenges certain budget revenue initiatives in Latvian Saeima
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