Latvian budget for 2020 passes first reading in Saeima

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The draft budget for 2020 passed its first reading in Latvia's parliament October 30 by 60 votes to 34.

Debates on the budget bill started at 10:00 a.m. and continued for nine hours with coalition lawmakers predictably speaking in support and opposition lawmakers providing sharp criticism. They lambasted the government for a failure to keep promises to medics and allocating more than 4 million euros to political parties instead as part of a reform of party funding methods. 

As previously reported, the 2020 state budget has consolidated budget revenues projected at EUR 9.89 billion and spending at EUR 10 billion.

Compared to the 2019 budget, next year revenue will increase by EUR 717.1 million and expenditure by EUR 610.1 million.

The general budget revenue in 2020 is projected at EUR 6.88 billion and expenditure at EUR 7.22 billion. Compared to the 2019 budget, the general budget expenditure next year will increase EUR 400 million or 5.9 percent.

Financing for implementation of projects and measures co-financed by the European Union policy instruments and other foreign financial assistance will increase EUR 74.8 million.

The social budget's revenue and expenditure are projected at EUR 3.2 billion and EUR 2.97 billion respectively. The special budget expenditure will be EUR 211.2 million or 7.6 percent higher than this year.

The government also approved an earmarked subsidy for local governments in the amount of EUR 382,689,344 and a state budget subsidy to municipalities in the amount of EUR 184,539,752.

Next year, 80 percent of revenue from personal income tax will go to local governments and 20 percent will be paid into the state budget. Personal income tax revenue for local governments is projected at EUR 1.4 billion.

In order to compensate for the Riga municipal public transport company Rigas Satiksme's negative fiscal impact on the general budget, the State Treasury will deduct EUR 38 million from personal income tax revenue received by the Riga City Council.

Gross domestic product at current prices is projected at EUR 33.154 billion next year. The maximum general budget deficit next year is set at 0.3 percent of GDP.

The maximum government debt at the end of 2020 has been set at EUR 11.75 billion.

EUR 1,889,071 will be allotted from the 2020 budget to the Education and Science Ministry for repayment of student and study loans.

The budget bill stipulates that the 2020 budget will receive at least EUR 127,070,731 in dividends for 2019 from power utility Latvenergo, at least EUR 71,065,500 from Latvijas Valsts Meži forestry company, at least 2,241,000 from Latvijas Loto lotteries company, and at least EUR 1,735,958 from power transmission company Augstsprieguma Tikls.

Lawmakers are hoping to meet President Egils Levits' target of having the budget bill passed by November 18 when Latvia celebrates its independence day. To that end the Saeima set November 1 as the deadline for submission of proposals for the second - and final - reading of the draft state budget, which is scheduled for November 13 and is usually something of a marathon session.

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