Saeima adopts the state budget for 2020

(14.11.2019.)

On Thursday, 14 November, the Saeima in the final reading adopted the Law on the State Budget for 2020, the Law on Medium-Term Budget Framework for 2020, 2021 and 2022, as well as amendments to 26 other budget-related laws

The revenues of the consolidated state budget for 2020 are estimated to be in the amount of EUR 9.9 billion, expenditure – EUR 10 billion. The general budget revenue in 2020 is estimated at EUR 6.9 billion, expenditure – EUR 7.2 billion.

The general government budget deficit for 2020 is set at 0.3 per cent of GDP, while the estimated GDP growth is 2.8 per cent.

According to Mārtiņš Bondars, Chair of the Budget and Finance (Taxation) Committee, which is responsible for the progress of the draft budget in the Saeima, ministries have revised their previous spending, and all sectors will receive increased allocations from these funds in the next year. The lowest salaries are to be increased, the ceiling for the differentiated non-taxable minimum income will increase to 300 EUR, and it is planned to increase the minimum monthly salary to 500 EUR in 2021.

Additional funding of EUR 228.7 million will be diverted to the social sector, and one of the priority measures will be the increase of state social guarantees for disabled people. The planned amount is EUR 80 instead of the current EUR 64.03. People suffering from disability since childhood will receive EUR 122.69 instead of the current EUR 106.72. The minimum amount of disability pensions will increase alongside state social guarantees.

Minimum retirement pension amount will also increase in Latvia next year. It will no longer depend on the state social guarantee amount. Instead, a calculation base set by the government will be used. In general cases, it is planned to be EUR 80.

Starting from next year, a number of benefits will no longer be pegged to minimum monthly wages. This will apply to state guaranteed subsistence funds, as well as minimum subsistence amount for childcare in foster families. The state guaranteed subsistence amount will be outlined in the Law, whereas the subsistence amount for children in foster families will be set by the Cabinet of Ministers. The subsistence amount will remain unchanged. Depending on the country’s economic situation and budget capabilities, benefit amounts may be reviewed in the future.

Next year, additional funding will be diverted to increase wages. This includes 60 million EUR for medical staff, EUR 23 million for increasing the minimum monthly salary rate for teachers, EUR 2.3 million for probation service employees and judicial staff, EUR 10.7 million for employees of the interior affairs sector, and EUR 8.3 million for culture professionals.

Additionally, EUR 4.3 million will be allocated for the compensation of medicines, whereas EUR 3 million will be allocated to the treatment of patients suffering from rare diseases.

EUR 7.8 million will be allocated to the maintenance of roads, and EUR 5.9 million will be allocated to help organize the media space, which includes the withdrawal of public media from the advertising market and enhancement of the information space. EUR 1.1 million is intended for the implementation of the administrative territorial reform.

Municipalities will receive an increased funding of EUR 63.1 million for the fulfilment of their duties, which is 3.6 % more compared to 2019. This amount includes funding for teacher salaries and maintenance of roads.

Next year, in order to continue combating shadow economy, it is planned to strengthen the tax administration’s involvement in contributing to fair entrepreneurship, providing the right to inform taxpayers about potential risks posed by specific entities regarding value added tax. On top of that, measures are planned to ensure convenient and quick public accessibility to company registration information free of charge.  

On the taxation side, the following year will bring an increased tax rate on gaming machines, roulette, card and dice games. Likewise, an increased tax rate will be applied to the extraction of certain natural resources, a new tax will be introduced on waste incineration, whereas the tax exemption on the use of natural resources in electricity generation or cogeneration is revoked.

The Law on the State Budget for 2020 will come into effect on 1 January 2020.

 

Saeima Press Service

Svētdien, 12.jūlijā

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