Unity reluctant over small business tax changes

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Unity, a party in Latvia's ruling coalition, has not voiced support for the last-minute changes to the micro enterprise tax announced on December 7 and is to meet PM Māris Kučinskis (Greens and Farmers Union) to discuss the plan that would raise taxes for small businesses but remove the requirement to pay minimum social insurance contributions.

Unity is concerned about the proposals affecting next year's budget, while the Greens and Farmers Union says it will push the amendments in the parliament even if Unity does not support them. 

Representatives of the Greens and Farmers Union and the National Alliance say that the changes will not alter the income and expenditure of next year's budget, which was adopted two weeks ago, however Unity is not sure over the matter.

Unity is awaiting for concrete estimates over the financial implications of these changes, said the party's deputy chairman Edvards Smiltēns.

He said that while Unity are constructive coalition partners, they also expect to know how various groups of people will be affected and whether there's no risk of the changes being challenged in the Constitutional Court.

While the Greens and Farmers Union says it'll push the amendments forward regardless of Unity's objections.

"I think they simply must understand that it must be done, that we'll push it to Saeima even if they don't support it," said Augusts Brigmanis, the leader of the Greens and Farmers Union faction.

These events are indicative of a bad quality of political work, as important decisions are being discussed two weeks after adopting the budget in hopes that they'll be run through quickly, politics expert Ivars Ījabs told Latvian Radio.

He said that the Finance Ministry is among those to be held responsible.

Ījabs pointed that while the government is stable, Unity is simply questioning the ruling party and have reason enough to do so, because everyone has to be careful with tax changes being rolled in so suddenly.

On November 23 more than 200 people protested against phasing out the microenterprise tax regime, but PM Kučinskis confirmed that the tax will still be removed gradually.

Small business owners also voiced disquiet over the decision to introduce minimum social insurance contributions for payers of the microenterprise tax.

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