Latvian government changes its mind on universal tax declaration plans

The Latvian government on October 16 announced it was changing its mind on measures announced only last week that would have made personal income tax (IIN) declarations mandatory from 2025.

Prime Minister Evika Siliņa (New Unity) revealed the change of mind via social media, saying it was "In order to prevent citizens from being burdened with unnecessary bureaucracy". The IIN declaration proposals will no longer be included in the legislative package of the 2024 budget. 

Finance Minister Arvils Ašeradens (New Unity) stressed that while the tax declaration plan was being removed from this year's budget plans, it was not being shelved for good.

"Considering that the concept of general income declaration is a very important issue for the entire Latvian society, I will urge wider discussions and consultations with social and cooperation partners about its content and implementation, as well as removing these amendments to the law from next year's state budget package. I believe that the planned amendments should be considered in the Saeima in the general procedure, or in three readings after the approval of the state budget," said the Minister of Finance.

At its meeting last week, the government supported making the declaration mandatory for most citizens from 2025. Some groups, such as most pensioners, would have bee exempt from submitting the declaration.

The Finance Ministry had explained that a mandatory declaration would have supplied tax authorities with information necessary to reduce the shadow economy and optimal tax payment. The plan quickly attracted heavy criticism.

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