The coalition Union of Greens and Farmers (UGC) will not agree to the abolition of the reduced value-added tax (VAT) rate on fresh fruits, berries and vegetables typical for Latvia, as well as to the increase in excise duty on marked diesel fuel used in agriculture and fisheries. This was reported to LETA by the UGC. With the start of more intensive work on next year's state budget, the UGC calls for a broader consideration of the impact of tax changes on the development of industries, national security and economic growth. The Chairman of the Board of the UGC, Minister of Agriculture Armands Krause points out that there are several areas in the agricultural sector, changes in which will significantly weaken their contribution to economic growth and international competitiveness, especially in comparison with the other Baltic countries. The political force notes that the European Union's funding for rural development in Latvia under the Common Agricultural Policy for 2023-2027 is 15% less than in the period 2014-2020, so the state must support local agricultural producers by not increasing the tax burden and by providing tax incentives. Also, Latvian farmers are still in an unequal position compared to farmers in other EU countries, receiving only 80% of the average level of direct payments in the EU. In addition, almost all EU countries have tax incentives for farmers. The SZK also emphasizes that the reduced 12% VAT rate on fresh fruits, berries and vegetables typical for Latvia should be maintained as a permanent tax after 31 December 2024, or at least as long as the increased tax rate on drinks with high sugar content is maintained. The party believes that increasing the VAT rate is unacceptable, as it will increase the final price of products, as a result of which the majority of Latvian residents will not be able to afford Latvian fruits, berries and vegetables. The UGC also considers it unacceptable to increase the excise duty rate on marked diesel fuel used in agriculture and fisheries. Currently, the excise duty rate for farmers is 15% of the standard excise duty rate, or EUR 62.10 per 1,000 litres, but it is still higher than for farmers in Lithuania and Estonia. In order to maintain the competitiveness of Latvian farmers, the excise duty rate should be maintained at the current level, the party notes. The UGC calls for maintaining state support for agriculture at the 2024 level of EUR 59 million, allocating funds for such important areas as the development of livestock farming, repayment of interest on loans, development of science and breeding, etc.
