Latvian wine producers demand additional tax breaks

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Small wine producers have teamed up with fruit and berry processors to propose a broader application of seasonal worker income tax reductions to promote worker registration, according to a Latvian Radio broadcast on January 14.

The Ministry of Agriculture indicated that the proposal needs to be discussed further to make sure the industry isn't being given privileged treatment. The Finance Ministry (FM) also expresses doubts about whether the tax reductions would decrease the shadow economy.

"The Finance Ministry is cautious in considering the expansion for this regime for several reasons – previously evaluated regimes haven't reached their defined results,” said FM Direct Taxation Department Director Astra Kaļāne.

“If I pick apples I have to get them to the winery, and we pick tonnes, not kilograms. Then comes the grinding and pressing where we need more people, because like it or not, my worker and I can't get by with just the two of us. There's also other seasonal work outside of production,” said Krimulda Manor winery owner Jānis Mikāns. He's operated in the industry for 10 years and frequently encounters worker shortages.

“The amounts could be small, but still, if we could officially recruit this way, then business owner would also start to recruit and pay for these workers," said Mikāns.

The Latvian Association of Winegrowers and Winemakers introduced the proposal at a Saeima Artisan and Small Business Subcommittee of the Economic, Agricultural, Environmental and Regional Policy Committee meeting. They proposed that business with a yearly turnover under 300,000 euros could use seasonal workers for other jobs.

The association represents 30 small wine producers, but representative Ričards Ivanovs thinks that there could be around 80 businesses in Latvia with a small alcoholic drink producer license.

"In a sense it's competitiveness, because small ones can't hire a large amount of workers and also don't need them every day,” said Ivanovs.

Ministry of Agriculture Head of Office Jānis Eglītis (National Alliance) said there have been attempts to realize such proposals in other industries, but that such a tax regime most definitely can't be applicable to full-time work.

“We can discuss how to simplify the worker registration system for all industries, but tax breaks should remain for those industries and those jobs that have an evident seasonal nature,” said Eglītis.

Data from the Rural Support Service shows that in the six years the reduced income tax program for agricultural workers has been in effect the number of agricultural business taking part has grown from 90 to 230.

As previously reported, the town of Sabile was once in the Guinness Book of World Records as the northernmost place where grapes are grown. Now vineyards span areas up north to Estonia and even Norway, so making wine from Latvian grapes may be a Herculean feat, but by any means it's not impossible.

Also reported, in addition to the usual grape wine, local winemakers experiment with the local flora, and the results are fresh and definitely out of the ordinary. The Tērvetes vīni winery offered samplings of gooseberry, apple, quince and raspberry wine at a small winery by scenic Tērvete river and panned out the winemaking process with a tour of the winery occupying part of an attractive, low log house.

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