President wants work on tax reform to proceed faster

RIGA - There is still time for negotiations on the proposed tax reform, but they should not take too long, President Edgars Rinkevics said during a meeting with Prime Minister Evika Silina (New Unity) at the Riga Castle on Wednesday.

During the meeting, Silina explained the decisions taken on and the timetable for consideration of next year's budget by the government before it is submitted to Saeima, said Rinkevics.

Speaking of the government's work on the tax reform, Silina told Rinkevics about plans yet to be discussed with the coalition partners. Taxation issues are always complicated for both the government, the Finance Ministry that is preparing the proposals, businesses and the public, said Rinkevics. Commenting on further work, the president stressed that there was still time for discussions about the tax reform, although he would have preferred quicker decisions.

"Let's be realistic. To a large extent, the tax policy depends on the discussions on the state budget," said Rinkevics. "I would like to hope that very soon there will be government proposals for the tax reform, tax policy guidelines for the coming years, and that there will be an opportunity to discuss these proposals with businesses and business associations, and the general public," he went on to say.

The prime minister said that the aim of the tax reform was to reduce inequality and the tax burden on the labor force, which, in her view, would not be easy. Silina pointed out that a way must be found to kick-start the economy as a whole through the tax reform, but this required compensatory mechanisms.

"We are also looking for ways to balance the budget so that it does not look like any painful cuts have to be made and so that this is not at the expense of the vulnerable social groups," said Silina.

During the meeting, challenges in work on the state budget were discussed, taking into account the highest priority - security, said Rinkevics. "By security we mean defense and internal affairs. Yes, we can talk about food safety, the provision of medicines and many other things, but they are not related to security in the classical sense," said the president.

At the same time, there is no need to dramatize the situation, said Rinkevics. Budget bids are excessive when work on the state budget starts each year, and each time some "insurmountable obstacles" are anticipated.

Rinkevics wished ministers and Saeima to listen to each other as much as possible and try be united in their work. Rinkevics said that he already saw one problematic issue - municipal budgets. Sometimes when new functions are delegated to local governments, municipalities cannot find financing for them.

"When we talk about the main priorities of the state budget, we should also try to understand how to help resolve problems and not impose new obligations on municipalities," said Rinkevics. "We are aware that it will be difficult to find a solution to every problem, but let us not exaggerate the importance of this budget compared to, for example, budgets in other years. This process is never easy," he stressed.

During the meeting, the two officials also discussed the process of liquidation of damage caused by a fierce storm on July 29.