The Latvian Free Trade Union Confederation (LBAS) and the Latvian Employers' Confederation (LDDK), having disagreed with the scenario of tax changes from the Ministry of Finance, have developed an alternative proposal. It is about increasing the minimum wage and moving to a fixed non-taxable minimum, which should also increase, LETA reports. At the same time, trade unions and employers have not yet been able to reach a common position on the proposal to change the personal income tax rate. The social partners propose to increase the minimum monthly wage by 40 euros next year – that is, to 740 euros gross (currently – 700 euros gross). At the same time, it is envisaged to set a fixed non-taxable minimum at 500 euros, with an expected increase in the following years so that it reaches 80% of the minimum monthly wage of the relevant year. Such an increase in the minimum wage and the non-taxable minimum could compensate for a possible increase in the value added tax, according to social partners. Back in June of this year, the ruling coalition rejected the idea of the Minister of Finance Arvils Aseradens (New Unity) to increase the value added tax (VAT) by one percentage point in order to compensate for the losses of the state budget, however, employers supported this idea in previous negotiations. Trade unions, on the contrary, do not support the increase in VAT, emphasizing that the greatest burden from the increase in this tax will fall on low-wage recipients, while it will affect all workers regardless of the level of salary. Finance Minister Arvils Aseradens said on Delfi TV that there is currently no political support in the coalition for the idea of increasing the VAT, however, behind the scenes, such a possibility is still being discussed.
