Number of high earner tax payers down 20%

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The number of people paying the so-called solidarity tax for high earners is down by about 20% from the estimates prior to the introduction of the tax, Finance Minister Dana Reizniece-Ozola told Latvian Television Thursday morning.

"It shows that entrepreneurs are looking for ways of not paying this tax," Reizniece-Ozola said, saying that she would support revising the tax, but not lifting it altogether. 

Reizniece-Ozola believes that the solidarity tax should be altered so the payers would also be eligible for some kind of benefits.

Other ministers and businessmen, however, are skeptical about this, the Finance Minister said. The ministers say that the tax was introduced to increase budget revenue, and any changes would reduce this revenue, while businessmen want the tax to be abolished completely.

The state has not suffered financially from the reduction in the number of persons who pay solidarity tax, but the introduction of the tax may have undermined the business community's trust in the state, said Reizniece-Ozola.

As reported, the tax on high earners, or the so-called solidarity tax, came into effect on January 1. The solidarity tax is levied on the part of highly-paid employees' salaries exceeding the ceiling for mandatory social security contributions.

In 2015, the ceiling was EUR 48,600 a year or slightly more than EUR 4,000 a month. According to LETA estimates based on last year's data, the new tax applies to some 4,700 working-age people in Latvia.

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