Latvian government backs additional spending in 2021 budget
The Latvian Cabinet of Ministers has passed the proposal to allocate additional funds to increase the wages of health care staff and teachers, as well as to change taxes with the aim of increasing the social security of the population.
The decision was made on Tuesday, September 22. The decision by the government indicates that in the state budget of 2021, a budget deficit in the amount of EUR 1.18 billion or 3.9% of the gross domestic product is planned. It is also planned to reduce the massive deficit in the state budgets of 2022 and 2023 to EUR 876.9 million and EUR 563.8 million.
It is also planned to raise taxes and change their recipients from the budgets of local governments to the state budget. The excise tax on tobacco will be increased in 2021.
More income in the state budget is planned from:
– changes in vehicle taxes and fees,
– from 75% of the resident income tax going to the state budget
– and from changes to the added-value tax after its taxation will be changed according to the respective directive of the EU.
On the spending side of the 2021 Latvian state budget, additional 304 million euros have been earmarked to the priority measures of government ministries.
Of this sum, EUR 183 million are planned for the increase of the wages of health care workers, EUR 33.3 million to the increase of teacher wages and EUR 7.2 million to the increase of the wages of academic staff.