Latvia's 2018 budget figures are in

Latvia’s 2018 budget revenues are planned at EUR 8.75 billion, while expenditures are projected at EUR 8.95 billion, according to the draft law on the 2018 state budget, which has been drawn up by the Finance Ministry and submitted to the government, LETA reported October 6.

The Cabinet of Ministers is expected to approve the budget bill next week, after which it will be submitted to Saeima to be passed into law.

Compared to this year’s targets, Latvia’s budget revenues are expected to grow by EUR 684 million next year, while expenditures are expected to rise by EUR 583 million. Under Latvia’s 2017 budget, revenues are planned at EUR 8.066 billion and expenditures at EUR 8.367 billion.

Subsidies earmarked in the 2018 budget for local governments will total EUR 350.88 million and the central government’s budget subsidy to the local governments is planned at EUR 57.58 million. The local governments are also expected to receive an estimated EUR 1.383 billion in personal income tax revenues and that their loan limit will be increased by EUR 118,138,258 next year.

Latvia’s maximum national debt is planned at EUR 10.25 billion at the end of 2018, and the finance minister will be authorized to issue guarantees worth EUR 35,956,620 on behalf of the state. The finance minister will also be authorized to cancel EUR 40,897,907 worth of liquidated companies’ debts to the government.

The value of Latvia’s GDP is expected to reach EUR 28.359 billion next year, and the budget deficit is projected at 1 percent of GDP.

The main change embodied by the 2018 budget is a shift from a flat-rate to a progressive tax regime.

So-called 'micro businesses'will also see significant rule changes from January 1 with their maximum turnover set at 40,000 euros rather than the present 100,000 euros.

There will also be significant changes to corporate taxes.

Minister of Finance Dana Reizniece-Ozola is expected to take next year's budget portfolio to the Saeima on October 11, after it has been passed by cabinet on October 10. The 2018 budget priority is the health sector, the funding of which for the first time exceeds EUR 1 billion, according to the ministry.

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