A review of the tax policy alone will not bring about a breakthrough for Latvia’s economy, said Bank of Latvia Governor Mārtiņš Kazāks in an interview to LTV programme Rīta Panorāma on Friday, the 31st of March.
«The tax system definitely needs to be reviewed – we have to look at what does and doesn’t belong. But changing taxes along will not secure a breakthrough for Latvia’s economy. A lot more needs to be done, and much was outlined in previous development plans. Now we just have to implement these plans,» said Kazāks.
The governor of the Bank of Latvia added that
the country’s future is not that of a country with low taxes and cheap workforce.
People want higher wages. Therefore the discussion would be more successful if we looked at taxes in a wider perspective – what we want to accomplish in the economy and what kind of economy we want to see. Kazāks also said the existing tax benefits should be reviewed.
The governor of the central bank mentioned that
approximately a quarter of taxes are not collected because there are various tax benefits provided.
«The money is already divided even before taxes end up in the State Treasury. Taxes are collected from some but not others,» he added. This is why, according to him, it is necessary to work on reducing grey economy by finally implementing previously suggested measures.
Also read: Latvia needs more money – all 14 taxes to be reviewed