Revenue Service collects €9.4 billion in government budget in 2018

The State Revenue Service collected €9.407 billion in the government budget last year, which is €120.436 million or 1.3% above the target, according to the information released by the tax service.

Compared to 2017, budget revenues handled by the Revenue Service grew by €788.421 million, or 9.1% in 2018. The Revenue Service’s representatives attributed the increase to Latvia’s economic growth and the Revenue Service’s performance, as well as tax reforms launched last year.

In 2018, social security contributions provided €3.204 billion to the government budget, beating the target by 0.6% and growing €410.5 million or 14.7% against 2017, as the healthcare financing rate was raised by 1%. Labor tax revenues increased on wage growth, which continued thanks to upping the minimum wage and the growth of the employed population.

Value added tax (VAT) generated €2.457 billion in budget revenues last year, beating the target by 0.2% and reflecting Latvia’s strong economic growth in 2018. Compared to 2017, VAT revenue grew by €269.22 million, or 12.3%.

VAT refunds decreased by €26.93 million, or 2.9%, from 2017 to €887.2 million last year.

Excise tax provided €1.029 billion in budget revenue last year, or 0.4% more than planned, for the first time exceeding the €1 billion mark. Excise on oil products accounted for 52.4% of that amount, excise on alcohol made up 23.5% and excise on tobacco 20.3%.

Budget revenue from corporate income tax totaled €304.004 million last year, beating the target by 30.6%, but dropping €121.6 million, or 28.6% from 2017.

Meanwhile, personal income tax generated less than planned in 2018, as budget revenue from this tax fell 0.3% short of the target and was €1.724 billion, up €20.49 million or 1.2% against 2017.

Personal income tax refunds grew €26.02 million, or 21.4%, year-on-year to €147.46 million.

In 2018, Latvia’s tax revenue was planned at €9.287 billion.

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